7 Problems Small Businesses Face: How To Solve Them

In its first few years of operation, many small businesses encounter many challenges. While some businesses manage to overcome these setbacks, several others don’t. Only 55% of small businesses survive five years or longer. With these statistics, the thought of starting a small business can put you off. But you will see that most of the time, when your business is on the line, all you need to do is take a step back and reassess your strategy. Here are some common problems small businesses face and their solutions:

Identifying and finding your target audience

This challenge doesn’t only affect small businesses but large corporations as well. Even the biggest conglomerates don’t wait for people to discover them; they have people working on the ground to bring in new customers! But as a small business, you will most likely feel the blow more significantly. If major companies like Apple are still looking for customers, how can your business become a household name? And with so many channels and tools designed to help you reach potential customers, how do you know which one to choose? 

So, what can you do as a small business owner? You must ensure that information about your business is reaching the right people. And to help you find your customers, you need to know who your customer likely is. Depending on the type of product or service you’re offering, you must develop what your customers like, what they do, and where you will likely find them. Once you’ve identified them, you can begin to create content designed to capture their attention. It’s a long journey but ultimately worth it in the end. 

Identifying and finding the right talent

About 52% of small business owners in a study said that their biggest problem when it came to operating a business was the quality of labor. That’s important to note, as you are probably aware that you will need good employees to turn your business into a success. 

You might be tempted to go the easy route to save some onboarding costs when hiring. But hiring is typically expensive, so if you’re going to do it, you should do it the right way. Like you would take the time to map out your target customers, so should you do the same for your employees. What kind of employees would you want to help you run your business? What positions are available? 

You will also need to work on your brand as an employer to attract quality job candidates and prospects. These candidates will feel excited and proud to work with a credible employer with an established presence. 

Increasing brand awareness

As mentioned above, you need to build your small business’s brand by creating awareness among your customers and even potential employees. Brand awareness establishes your business and helps build healthy relationships with your key stakeholders. There are a few strategies you can adopt to help spread the word about your business:

You can maximize your public relations efforts by establishing relationships with your customers, employees, suppliers, and even the media. You can also consider partnering with another brand to help you tap into other customer bases that you can include in yours. Finally, you can take up blogging. Blogging takes time, but a well-run blog will not only direct traffic to your business. It would also set you up as an expert in your industry. 

Supply chain problems

Smaller companies are often disadvantaged in supply chain management or getting access to suppliers. You simply do not have the leverage a large corporation would for supply chain management. That means that your business will end up paying more for products. Therefore, you must track your costs to know how much you spend regarding logistics. Tracking helps because you might identify spots where you can save some money. You can also partner with others in your ecosystem to share logistics costs by ordering from the same supplier. Small businesses may face hurdles in supply chain management, but with effective planning routes with multiple destinations, they can find cost-saving solutions and collaborate with their ecosystem to overcome these challenges.

Additionally, you must ensure that your negotiation skills are top-notch. Do your research to help find the most reliable and affordable supplier. By obtaining two or three invoices for your potential expenditures, you will better understand how much you should be spending and how much you can save. Alternatively, you can speak to a professional to provide supply chain solutions to help your small business. 

Financial problems

Most small business owners are afraid of running into financial or cash flow issues. There are tons of incoming and outgoing business transactions needed to keep your business afloat. You will inevitably run into cash flow problems. The best thing you can do is track where your money is going and where it is coming from. If you’re not so good with money, you can hire an accountant to help keep your books balanced. But if you are now starting and do not have the funds to hire a third party, there are still some solutions to help you. 

You can look into purchasing and installing accounting software programs that will help you track your transactions and create invoices, among many other tasks. These programs can also alert you when you have a payment due, or you need to update your books or bank statements. There are other strategies you can also adopt into your business. If you run a service, you can ask customers for a down payment to help you purchase the right supplies for the job. 

Succession planning 

Another problem that many small businesses face is succession. Who takes over the business when the founder retires? The truth is many business owners do not spend time thinking about succession plans because a large chunk of their time is spent on day-to-day activities. Plus, it can be hard for a business owner to retire and transfer ownership to someone else on an emotional level. 

Nonetheless, it is an important thing to consider when running a business. Unfortunately, you might not have a competent child to take on responsibility, so you would have to look out for your potential successor. You can take the time to identify the right person or even promote from within your business. 

Avoid burning out

You are probably doing everything by yourself if you are starting your new business. You know your business at the back of your hand, and you’re abreast with any updates. You can probably do the work faster and more efficiently than anyone else. That’s good, but it might cost you in the long run. When you are getting stressed out, remember to take some time to unwind. You can work out, spend time catching up on your hobbies or favorite TV shows or just spend quality time with family and friends. 

Apart from your health and social life taking a hit, extreme fatigue and burnout can cause you to quit your business altogether. Since you wouldn’t want that, it’s important to delegate and hire extra help. Train people to help you with simple tasks to focus on more important aspects of your business. Ensure that the lines of communication are always clear for your employees. And remember that you are not giving up control. You are simply getting assistance. 

It is important to note that as a small business owner, you need to learn to stay calm in these challenging situations to help you better strategize how you will pull yourself out of this challenge. Your competitors are also experiencing the same challenges, but how you respond to these issues determines how successful you will be in your industry. It might take some time, but you can overcome these challenges.