What are the most common challeges of and for small businesses?
A friend of mine is setting up a small manufacturing unit and reached out to me for advice. What are the most common challenges and pain points faced by small and medium businesses? I am interested in understand these in a use-case form for better clarity. These could span processes, procedures, business challenges or operational challenges.
Few challenges for SME business are :
Finding Good Consultants – While we’re thinking of people that you should have on hand to help you out, it’s never a bad idea to look into a good startup consultant. You might have to do a bit of research to find one, but they’re often a worthwhile addition to your startup. You don’t have to hire them full time, either. You could just keep them on retainer and call them up when you need something. Don’t be afraid to ask too many questions—that’s what they’re there for, after all.
Balancing the Budget – So many startups get over extended in a financial sense. The people in charge get too excited with their purchases, or they spread themselves too thin, and an unexpected expense pops up, ruining everything. Have a tight budget written up and leave extra money for surprises. You’ll be glad that you did.
Examining the Target Culture – Learning about what is and is not offensive in your target culture can go a long way. Countless companies have placed ads that were culturally insensitive without realizing what they were doing. So find out what the local culture is all about and be sure not to upset anyone. You don’t need to know a language to learn about a culture, but it helps to have someone on hand that speaks the local language just in case. If you can find an actual local then it’s even better. Run your ads and logos by them before public release.
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Getting an awareness of focus and inviting people who are not flakes to help out has always been my lack of skills in reaching out for help only to find those people let me down. Yes somehow I attract and help flakes who always volunteer to help me and who let me down. So I end up learning myself and seeing things through to the end. However, in this modern tech life, I lag behind being 74 years old.
As a business plan archive curator, I recommend reading business plans of other manufacturing companies to get more insight on business processes and execution.
Today the most common challenge for any business is maintaining cash flow money.It is the major cause of worry and more than 90% of businesses close due to this factor.How do you you do it and how long one can do it depends upon person to person.
I run a leading Digital agency in Birmingham, UK called Odyssey New Media (odysseynewmedia.com).
From our POV as an agency model, I would say these are the toughest challenges:
1) Cash Flow - chasing clients to pay their invoices sucks up a lot of time. I suggest you look into direct debit or payment in advance. This is something we are working on.
2) Staffing - In an agency you need people who are commited, focused and self-driven. There's always something to do in digital marketing, if you aren't marketing other clients, you're marketing your own business. You need good staff who are able to adapt as well as educate themselves in their own time to stay ahead in the knowledge stakes.
3) Sales - As a small business, you're always up against bigger players. It's important that you position yourself as bigger than you are in as many areas as possible. Dress smart for meetings, shirt, tie, shoes, suit jacket. Make your website look amazing, get your case study material sorted early, get videos made. Anything that will make you appear like you're big and can deliver the service clients need.
Hope that helps, those are my top 3. My agency has grown significantly through delivering exceptional results for SEO, PPC, Social media as well as great looking websites. If anyone is in need of our services please drop me an email - rstoubos (at) odysseynewmedia.com (dot) com.
there are many challenges that small businesses face but the most are quality with competing preices & discounts , ability to compet with big businesses can give lower prices with long term credits , while small can not do that any how , even services after sales can not be maintained the same way with others in market .
They need to make sure they can market their product/service. Just because there is good knowledge as to how to do the what the business does, does not mean they know how to get others to see it as well.
Someone suggested the person setting up this business get some professional advice. Your comment was that they do not have the money. Two comments on that...
First, as a business coach, I have a LONG list of those who could not afford paying me to help them get up and running... and to SURVIVE... who are now out of business. The question is... can they afford NOT to get professional assistance.
Secondly, marketing does not have to cost anything, if done correctly. Rather than try to write all my thoughts down, I strongly recommend your friend review a free video I put together about the 3 biggest lead generation mistakes made and how to correct them. This can be found at this link: http://bit.ly/28V7NtB
You have already marked head points for the solutions of small business.
Prime object is to find out the exact market potential of that project which you are opting for your friend.
Second find out the comparative article of our strength with competitiors which need deep technical study. It indicates, "Nothing is small or big "business.
Best analyss would not only help you to gain best percentage inmarket but also would help you to stand for long run.
Need a best businee experts advice AND GUIDE.
Allocating time to essential activities or prioritizing the many tasks of a small business owner is important.
1. Work for service or consulting companies is what pays the bills. This is billable time and the source of cash.
2. If you never pay attention to Indirect activities, you will fail. For example, if you only do work or consulting and never send invoices, you will not have the cash flow to stay in business.
3. If you never "sharpen the saw" through study or CEU's, you will eventually fade away due to lack of current knowledge, inability to renew licenses, etc.
4. Bookkeeping and taxes: These are essential tasks for any business.
5. Marketing, Advertising, Sales, Website: If you do not pay attention to these things, you will not generate enough sales to stay in business.
So with only 8 hours in a day, how do you prioritize these activities. My suggestion is to spend 6 hours a day on the first activity, one hour a day on the second and one hour a day on the 5th. Hire consultants to do 4 and to do any undone tasks of 5. Number 3 reserve for weekends, holidays and "vacations" that are working trips to have fun and learn something.
You say "Only 8 hours a day?" YES! This is a small business. If you are going to work night and day like I used to, pulling 60 all nighters a year, FORGET IT! You will destroy your health, family relationships and everything that is important to you. Go back to work for an employer.
One of my best employers, who taught me a lot, gave a lecture one day on "Cash is King." I am sure he did not come up with this, but I do not know where he got the idea. But it is a good one. Do work, Invoice, Collect Invoices. This produces cash in the bank account and keeps the doors open. If repeat clients and word of mouth does not produce enough customers, then find a way to hire good consultants that can grow the business.
I like to believe that those who are "tool box qualified" that go into business for themselves have two main challenges. Money, and marketing. People falls into the money and marketing segmentations because you must have people (either on hand or outsourced) to accomplish what the owner cannot. Most TBQ's I have worked with in the past understand that when they focus on the business, they have no time for marketing. When they are marketing, the business goes to hell. Therefore, there is never enough money, and the roller coaster ride of feast and famine are stressful, which ultimately leads to failure 9 out of 10 times (or even greater).
Most small businesses fail because they are undercapitalized. Mistakes cost money, but is never planned into the scheme. People are never planned for well enough UNLESS significant financial resources are available with a sound financial plan.
Bringing on a marketing firm early in the business process (could even consider a co-partner approach) to build the brand, develop web presence, and reach top of mind status as quickly as possible can solve most of the issues a startup will face.
"99.9% of the world's population are fools...and the rest of us are in serious danger of contamination" Horace VanDergelder. Likewise 99.9% of new business owners I know simply to not learn professional selling perpetually, prospect enough, network enough, learn enough, refer enough and otherwise make certain you have a first class selling strategy, process and measurement. It doesn't matter how good anything else is, sales drive growth, growth breeds success.
The biggest challenges according to me are two- making your product acceptable in the market and bringing in a culture that promotes honesty, integrity and accountability
Getting a decent website.
Getting website found online.
Getting staff to think and work as you, the owner!
The top three are Money, Money and Money. The rest is all commentary.
As a branding and marketing consultant, I'm in touch with many small businesses. While they each have varying challenges, I find that many of them skip some crucial first steps: determining that there is an audience for their product or service (instead of just assuming that there is) and creating the right messaging to persuade that audience.
Undertaking market research before "going to market" is crucial -- and potentially a money-saving action. If you don't have the buyers for your offering, you don't have a business. And if you don't have the messaging that will convince them to buy -- detailing what benefits and value your offering provides -- the business needs to take another look at what they're selling and how they're positioning themselves.
Most business owners that I have met and worked wither the past 10 years or so are very good at what they do, but when it comes to other aspects of running a business, they are mostly out of their league.
The life blood of any business is the customer and prospect list. In order to grow the business and generate more revue and cash flow, you must generate leads, convert the leads into paying customers or clients and get them to buy more than once.
Many business owners do not know how to do this. They try and fail because they do not understand the real way to do it.
Another challenge is they wait until it is too late to ask of help.
The best way to solve these problems is to hire a professional to do it for you. After all, when you get a tooth ache, you don't try to fix the tooth yourself, yo go to a dentist. The same with marketing. Hire a professional who understand small business marketing strategy and how to properly market your business and generate all the leads you can handle.
Accept only one challenge:
How to grow big? do everything.
Kunal, in my experience the biggest challenges faced by small business arise from failure to plan and failure to establish a sturdy foundation. Too many folks are wooed by the prospect of "making it." They jump right in not having answered the question- What does it take to swim?
The most common challenges are
1. Collection of Payments
2. Business Administration