7 Small Business Challenges

Running a small business is a challenging task with limited resources. Many small business struggle with common problems which include:

1. Inability to grow and stay in business.

The first goal is to stay in business and prosper. The challenge is "how" and "what" is the best method to grow and prosper. There are many business factors that have to be constantly managed in order for any business to grow and prosper effectively. These include:

Having the right amount of capital
Having great service or a unique product
Hiring and managing the right people
Managing the cost
Sales & Marketing Strategies that deliver consistent results
Using technology to your business advantage
Taking care of your customers
Planning for growth

2. Wallet is not big enough.

You gather all the resources you can to start a business you withdrew all your life savings, borrowed money from your parents, even mixed out your credit cards. When you open for business, alas, you find that customers and sales can be pretty elusive. You wait, and wait, and wait, but cash is running out. Without money coming in, you decide to cut your losses and close down the business.

Solution: Get an outside objective view as to whether your assumptions and related projections are realistic. Is the market for your product/service being reached? If so what is the best way to get a response? How does your product/service solve a clients problems? How does your product/service stake up against competition? Are there other sources of capital you have not tapped? Small Business factors can provide you with the proper analysis and suggestions for acquiring new capital or insuring that the capital you have will provide enough fuel for you to become self sustaining.

3. Product or service isn't "delighting your customers"

Your success depends on whether you provide products or services with value to your customers. Many small business entrepreneurs fail to effectively communicate to their customers the benefits of their products or services. This is particularly true of many small business owners who have little if any experience in marketing or managing for growth.

Solutions: The acceptance of your products will depend on how well you are able to represent your business in the minds of your customers. If you know that you offer good quality products or services with value, the next step should be to get that information across your target market. Generate customer interest in the product through effective advertising and promotions. Constantly assessing customer satisfaction is critical to long term success. There are many inexpensive ways to monitor customer satisfaction and Small Business Factors can provide you with ways and tools to do so at the least amount of cost.

4. Marketing and advertising fails to elicit response

You must develop effective strategies to market your business. But is your marketing plan working, or are they just a waste of time and resources?

Many business owners, in an attempt to save on costs, develop their own marketing campaigns only to fail in their intended purpose of bringing in more business or achieving "top-of-mind-awareness" in the mind of the customer. They spend time and resources on wrong advertising medium.

Solutions: To achieve your marketing and advertising goals, you need to have an effective message, market position, and adequate funding. An advertising message that is "believable and relevant" is the key to promotional success. When you have the right thing to say in your promotion, you will drive sales. And when the right message is also unique, it becomes even more effective. The best marketing usually comes from existing customers

5. Failure to adapt to changing market conditions

Changing market conditions may include downturn or upswings in the economy, heightened competition, or even common business risks such as Web site business interruption or calamities. Change is inevitable and knowing how to adjust quickly is the key to survival.

Solutions: Stay abreast of the rapidly changing business environment by reviewing your company’s business strategy. If you determine that your current strategy will not work, overhaul your business focus, if necessary. It is important that you study your customers thoroughly so you can track customer preferences and buying trends. This will help release your company from the economic ups and downs. Outsourcing this kind of regular analysis can be done without a lot of expense.

6. Poor management

Poor management ranks high among the reasons for the failure of many small businesses. It may cover anything from the inability to manage people, security, financial aspects, marketing or customer relation aspects of a business.

Poor credit management is another common source of the downfall of many businesses. The failure to handle credit well is often the precursor of many cash flow problems.

Solutions: Starting a business has numerous risk. Whether you've already got a business running or just starting one reducing the critical risk can mean the difference between success and failure. Small Business Factors can provide you with an analysis of the risk and how to reduce those that impact you most.

7. Lack of know-how and regulatory compliance

Many small businesses perish because the entrepreneur simply lacks the know-how in a particular aspect of business. This is particularly true for small business owners who must learn how to wear many hats. You may be good in creating your crafts, but you may need help in setting up your accounting system or distributing your products. Or you may have an idea where to find additional financing, but lacks the skills to network in the mainstream capital sources.

Regulatory compliance is another black hole that has forced many small businesses into closure. From simply issues such as payroll taxes, federal taxes, environmental compliance to other state and federal regulations many business owners are not even aware they are out of compliance until it is too late.

Solutions: Get a board of advisors, or consult a mentor. You may not need a full complement of a formal board of directors, but your business will benefit from the advice of 2-3 people who can provide you with the knowledge in areas that you need help.

Or you can hire on a retainer basis some professionals in your area, such as a small business advisors or a business consultant. You can also seek the help of business counselors such as the Service Corps of Retired Executives (SCORE), who can provide you with experienced counselors in your field.

Small Business Factors is a non-profit organization aimed at assisting small business owners with solving these and other common problems. Our resource pool consist of experienced business owners and executives from large corporation who have retired to help the small business owner. It is safe to say that our group has made virtually all the mistakes a business can make and our goal is to help others avoid the same mistakes by sharing lessons learned and the solutions for common problems.

Contact us for a free assessment of how we can help your business succeed. email Joseph Rounds at jrounds@smallbusinessfactors.ws