Published on 15th August 2014 by Gemma Harding
No one said running your own business would be easy. If you’re an entrepreneur or manage an SME, every day will bring problems – both big and small – that you’ll need to solve. Without the deep pockets of a large corporation, you’ll have to get creative rather than simply throw money at a problem. However, you’ll probably enjoy the challenge – that’s why you went into business in the first place, right? Here are 4 common challenges that business owners struggle with, as well as ideas for how to overcome them.
1. Employee Retention
Employee turnover is one of the biggest hidden costs, draining valuable resources from small businesses. As soon as you’ve got an ideal employee fully trained and in place, they’re lured away by a more attractive offer. Not only is this a waste of your initial investment in them but you’ll need to spend more money finding a suitable replacement.
If holding on to your top talent is a problem and you can’t afford to offer a top-end salary, think of less costly ways you can tempt people to stay. Flexible working practices – including flexi-time, working from home and job-sharing – is a good solution, as more and more employees seek a better work-life balance. Also, think of how you can improve the mood of your workplace and train your staff to be independent problem-solvers, not pen pushers. It’s not all about the money – employees want to work in a positive environment on tasks that will motivate and engage them.
With the rise of internet-based retail, there are more and more ways to get your message out to potential customers. At the same time, how do you get heard above the clamour of competing voices? Smaller businesses generally don’t have big budgets to spend on traditional advertising like TV or magazine ads so you’ll need to think of cheaper and more cost-efficient ways to market your company. Direct mail, for example, is still one of the most effective ways to target potential customers – you can choose who to target based on data such as age, postcode or previous purchasing history, and response rates are high.
A carefully coordinated web-based marketing strategy – using social media platforms like Facebook, Twitter and Instagram, as well as banner ads, guest blogs, online competitions and more – is another great way to market yourself without spending too much. If you don’t know enough about SEO and web analytics to do the job yourself, get a digital marketing agency to handle it for you.
3. Managing Business Volume
The early stages of running a business can be the most challenging and even with carefully calculated projections, you may struggle to meet fluctuating demand from clients and customers. It can take a long time for an SME to gain traction and then suddenly the phone is ringing off the hook. While you don’t want to waste money on over-staffing during quiet periods, being caught short and unable to meet demands could damage your business reputation and drive customers away as quickly as they arrive.
Outsourcing various aspects of business operations is a smart way for business enterprises to stay lean and flexible when responding to demand. For example, outsourcing reception services and customer enquiries to a dedicated call centre means you will always be able to meet demand without the cost of hiring and training staff yourself. Call centres provide more than just telephone answering services, they can also handle sales, surveys, diary management, technical support and other customer service requirements across both online and offline platforms.
4. SME Financing
You’ve got big plans for your SME, but where do you find the money to realise them? You won’t be able to grow your business as quickly as you like unless you’ve got available funds to scale up when the time is right. However, if you borrow money and don’t invest it in the most cost-efficient way, you may be spending more on interest payments than you’re generating through that extra capital. Owners of smaller businesses still turn to their local bank manager when they require additional finance but long-term bank loans have become harder to access in the years following the financial crisis. This has left many struggling to find suitable finance options.
Business owners without enough security or new start-ups without enough business history will need to look for different ways to access the funds they need. Peer-to-peer lending, government grants and asking family and friends may be better when you first start out. Equity financing will ensure you don’t get saddled with too much debt, but in return you’ll have to give up some control in your business. For companies with a high volume of card sales, invoice financing may also be a suitable short-term solution for acquiring ready cash. Wherever you look for extra financing, make sure you can afford it. If interest payments on the money will cause cash flow problems, find another solution.
There’s no shortage of daily struggles for the average business owner. Finding creative solutions to overcome those challenges will develop your skills and knowledge and put your business in the best position to succeed.