Starting a new business can be an uphill task, and it is even more difficult to sustain one. In the early years of launching your business, small businesses tend to face all sorts of challenges and struggles, oftentimes, it is difficult to surmount these obstacles.
There is always a certain point where business owners have no choice but to face some of these business obstacles head-on.
Data from the United States Bureau of Labor shows that up to twenty percent of small businesses flop by the end of their first year, up to fifty percent go under in their 5th year, and that number increases to eighty percent in the 10th year of running the business.
With all these statistics, one can deduce the reasons why business owners face these challenges, and also most trying obstacles within small businesses are actually solvable.
Struggles of small businesses
Oftentimes you simply need to step back, understand the obstacles you are facing, and restrategize.
Here are a few of the struggles of small businesses coupled with some strategic tips on how you can overcome these obstacles.
1. Getting Customers
Getting customers is not just a struggle for small businesses, in fact, this is one of the primary things to overcome for every business. Even big businesses and brands are always looking for new methods of getting more customers to patronize their business.
However, for small businesses just launching, it can be more taxing to get customers.
Most customers often prefer to patronize popular brands and businesses they know, and the ones that aren’t household names find it difficult to get customers.
The primary step to fixing the problem is researching and figuring out who your ideal customers are. You won’t get any results from praying and keeping your fingers crossed, you need to promote your business to the right ears, on the right platform. Build a buyer’s persona and identify your target audience and the platforms these target customers spend their time online and what they do.
By identifying the buyer’s persona, you can leverage the platform they spend their time online and effectively put your content forward for these target customers, this can significantly boost your business results.
2. Lots of Competitors
Having plenty of competitors is a major struggle for most small businesses as it can be very difficult to get recognition and get ahead of big brands in your industry.
Maybe you have a better product or provide a more high-quality service than your competition, but they get all the business because they are bigger brands and more established.
This experience can be daunting and kill the motivation to keep running your business.
Regardless of the size of competition in your industry, there’s always a customer for everyone. To get ahead of your competitors and win in your industry, research your competitors.
Also their strategies and what they do to win in the market. Then you can figure out gaps where they’re lacking. By doing so, you can evade mistakes new businesses make.
Emulate strategies that work for your competitors and do it better, provide a premium service, be innovative and you will definitely come out successful.
Another solution for this issue is to target a narrow niche in your industry and scale up once your business starts getting recognition.
3. Poor Cash Flow
Insufficient funding is another serious struggle for small businesses. In fact, up to 29 percent of small businesses go under due to poor cash flow and insufficient funding. Most business owners focus on investing in expensive equipment, office space, and too many employees.
In the first year of launching their business, this can result in burnout of finances and the businesses fail due to insufficient funding. Some business owners mismanage their money sources.
They start their businesses without proper financial planning and wasting money on marketing strategies that do not work. Your business can crash and go under when incoming cash flow is not sufficient to meet the outgoing cash flow needs of your business.
Before starting your business make sure you have a solid financial plan. Furthermore, make sure you avoid unnecessary spending, cut costs where possible, and only invest in tools that you really need.
Also, you do not have to start your business with a large team, start small and scale up when your business starts growing. Don’t waste money on inefficient marketing strategies, stay on top of book-keeping and invoices to properly manage your cash flow.
Another good tactical strategy to try is employing the service of professional financial advisors who will analyze your financial problems and help you make better financial decisions for your business.
4. Hiring the right employees
Research has shown that one of the major struggles of small businesses is the challenge of hiring and employing top talent, even bigger brands and established businesses face these challenges too.
The importance of hiring the right employees cannot be over-emphasized, as their performance will be a contributing factor to the growth or fall of your business.
Startup businesses often face this issue as a result of being under-resourced and having limited funding to hire top talents.
One of the best methods to tackle this problem is to target fresh and talented graduates with potential, these new graduates are not yet experienced to charge a large salary and do not have a high cost of hiring.
Another tip is to carefully review job applicants – make sure they perform and provide the services required of them.
Finally, offering non-financial work benefits like healthcare, wellness programs, mentoring programs, and flexible working hours has proven to be effective and more persuasive when hiring top talents.
5. Retaining Customers
Another common struggle of small businesses is the struggle of retaining new and existing customers. The ability to retain your customers can significantly contribute to the growth of your business, however, most small businesses fail in this sector. Most startup businesses start to lose their customers after some time, it may be because they do not like your product, the quality of your product/service, or maybe your pricing is too high for them.
One of the most effective ways to retain your customers is to conduct a customer survey for customer experience and ratings. From the feedback of this survey, you can establish how to best serve your customers and provide the best experience possible.
Also, you get to know why they are leaving and things to change to retain your customers
The above struggles of small businesses and solutions will help you better prepare when starting your business.
However, it is important to understand that not all businesses can become successful at their opening attempt, and you will face different challenges as a startup business.
How you tackle these challenges will determine the success of your business.