Small businesses are the backbone of any economy, but they also face a wide range of challenges in their quest to flourish and support their clients.
This year looks set to bring even more issues for small businesses, with early predictions showing that as many as 600,000 small businesses could close this year thanks to the Coronavirus and the chaos this has caused.
While government grants and stimulus packages can help those firms that are struggling because of the pandemic, some business closures might be the result of poor leadership and basic mistakes.
If you’re running a small business and want to learn about the most common challenges small businesses face, and how to deal with them, then this is the article for you.
Every company needs a comprehensive business plan in order to survive and thrive, but many leaders choose to forgo this crucial step in setting up their company. As a result, they struggle to sustain their initial success and quickly find their business floundering. A strong business plan, complete with detailed information and insight into what your business is aiming for and how it will achieve its goals, will help you and your team to grow your business and achieve lasting prosperity.
For many small businesses, poor financial handling has a knock-on effect on the rest of the organisation, resulting in serious challenges and eventual closure. As such, it’s crucial that small business leaders understand business finance, particularly during times of change, such as growth and economic uncertainty. Without a basic knowledge of the costs of expanding, and where to get the money you need at the best possible rate, companies may quickly find themselves unable to finance their growth plans, or paying vast amounts of interest.
A Lack Of Sales
Sales are crucial for any organisation, whether it’s providing services or products. Without customers buying from you, your company won’t be able to survive. There are a number of reasons why a quality product or service might fail to sell, mostly revolving around poor marketing, limited advertising, and a lack of proactivity from your sales team. If you notice even a slight dip in your sales figures, then you should work to identify the reasons why your offering is failing to sell quickly, rather than waiting until the issue has had a serious effect on revenue before you act.
Unsustainable Growth Plans
The growth of any business needs to be sustainable. Otherwise, the company faces challenges, such as an inability to meet demand. Expanding an organisation too quickly can lead to poor investment and a lack of brand continuity, resulting in reduced client retention and a damaged reputation. Any growth projects that your small business has must be properly planned so that you know that they are sustainable and will enrich your company.
An Inconsistent Brand
Branding is crucial to establishing your company as a leader in its market and showing customers that you are trustworthy. Without a consistent brand, companies quickly find themselves struggling to attract their target customers and retain existing clients. Many organisations also find it hard to show potential customers the value in their product or service offering without a strong, consistent and memorable brand. Creating brand guidelines is incredibly beneficial for companies struggling to get their vision across to their team members and ensure consistency in all communication.
Technology Isn’t Incorporated Properly
Technology and software solutions play a major role in providing clients with the quality, innovative services they need and want. If a small business does not use technology effectively, then it will quickly find itself falling behind and unable to support its clients. Make sure that you regularly review the solutions and products available to see if any of them can be incorporated into your organisation and its offering.
Unsupportive Management And A Bad Internal Culture
Businesses are built on teams, and unless you’re a sole trader, you’ll be relying on a wide range of internal and external suppliers, staff and supporters. Without strong leadership, these teams will be hard to manage, and many staff will end up seeking employment elsewhere. A high turnover of staff and a poor relationship with suppliers and industry peers can seriously hinder your company’s ability to serve its clients, which is why you need to create a supportive, caring internal culture. This means more than just saying you support your staff; it means providing them with the help they need when things get tough.
Not Adapting To Changing Customer Needs
The corporate landscape is constantly evolving, which means that new businesses, ideas and technologies are regularly being introduced. If your company doesn’t adapt to the latest developments, it will soon fall behind its competitors and cease to offer its clients the services they expect. Learn to adapt to changes in the business world to ensure that your organisation is always offering clients exactly what they want.