Starting a small company is very similar to raising a child. You will have to nurture it, spend many nights taking care of it and you will need to do this until you pick up momentum. When you have a team, you will celebrate every single accomplishment, whether it is big or small. You will also have to bring in new faces to fill in new roles and deal with the operational difficulties you come across along the way. If you want to find out more about the common pain points that most businesses face, then simply take a look below.
Changing the System or the Process
The systems and the processes that worked for your business when you managed 30, or even 50 employees may not give you the same results when you are trying to manage 500 employees. In some instances, especially if your business is growing rapidly, you may need to try and streamline your processes so that you can avoid both loss and damage. That being said, you should not do a full overhaul without studying your current setup. You also need to ask for feedback from your managers as well before you make any drastic changes. This will help you to make sure that you are making the right changes and at the right time. One step that you can take to try and address the pain points that come with changing the system is to hold training for your staff so that you can prepare them for more responsibility in the future. You can also encourage them to have more career growth in the future as well. Another option would be for you to bring in new resources, whether they are physical or financial. Remember, that the solution you are adopting should always be based on your current situation and the needs that you have. Don’t go out and buy expensive equipment and don’t hire new employees if there is just no foundation for this.
During your earlier days in the industry, you may have lived and breathed innovation. This is probably why you wanted to start your company in the first place. You saw a gap in the industry, or you saw a problem and you wanted to solve it in a way that was both fresh and creative. People may have been excited about this as well, after all, if you are able to be different, then this will help you to really appeal to the masses. What most small businesses fail to do is keep that spirit flowing. They find it hard to be continually innovative, and when they begin to experience growth, they become confident that customers will come to them time and time again. They think that customers are always going to want their product and that offering something new just isn’t needed. This isn’t the case. At the end of the day, your competitors are also trying to target and attract the same customers that you are. If you completely disregard innovation and if you fail to offer something new, then this will hurt your small company more than you realize. A great way for you to work around this would be for you to ask for feedback and for you to also conduct research so that you can find out about the needs of your customers. You can then tweak the product you have, or your service accordingly. Even though your product may satisfy your customers today, it will not satisfy them one year later, unless you change it, or bring in something new.
Not Having Enough Capital
One of the main reasons why a lot of businesses fail is because they are not utilizing capital enough. Entrepreneurs and business owners often find themselves underestimating how quickly their capital and financial resources get used up. One moment, everything may be fine, and the next, they may find themselves scrambling for money so that they can pay an unexpected expense. This is why it is so important for businesses to always look out for capital and various other financing options. This is the best way to keep things going. It may be that you need to take out a small business loan, that you need to explore the idea of angel investors or that you need to explore venture capital. It’s not guaranteed that you will make money when you do open your company, so it is important that you have some resources lined up so that you can make the best decisions possible. Try and bootstrap your company where possible, and also outsource your work to contractors if they are able to offer you affordable rates. If you are starting an online store, it may be that you need help from an ecommerce expert.
82% of the time, businesses fail because they do not have a good understanding of cash flow. Maintaining consistent cash flow is so important if you run a small business, regardless of the stage that they are in. If you do not have a consistent level of income coming into your company, then you may find that your whole operation slows down or worse, things have to be postponed. There are many reasons why you may have cash flow problems, but most of the time, it comes down to delayed payments and debt. During the earlier stages of your business, your expenses are probably not going to be bigger than your revenue. This is fine, but never max out your existing cash, or exceed it because you have too many expenses. Your business will only be successful if you are able to bring in more money than you spend. One of the best ways for you to address your delayed payments would be for you to use an online payment solution. When you do this, you will then be able to take advantage of online invoicing. Digital solutions really do provide you with a seamless way for you to bill your customers and at the same time, it makes it easier for your customer to pay the bill. Integrating something like this into your process gives you the chance to focus more on growing your business, as opposed to chasing down delayed payments.
Marketing on a Budget
How do companies market and compete with each other, on a small budget? You have probably asked yourself this question time and time again. That being said, the good news is that you don’t need to spend a lot of money in order to get the ball rolling. There are many affordable ways for you to market your company and one of the best ways is content marketing. Content marketing is a very good way for you to begin marketing your small company. It doesn’t cost a lot, and you can even create your own content channels and company blogs. Case studies are also one of the most effective sales tactics. Find successful companies and study them, how do they attract prospective customers? Lastly, you have email marketing. When you have created your customer base, the next wise move would be for you to try and keep them consistently engaged. Email tools such as MailChimp are very good here, so keep that in mind.
Revenue and Sales
Aside from creating a fantastic product or service, it’s important to know that growing a business requires a lot of business owners to have a good understanding of their numbers and the sales that they are making. If you are the owner of your business, then it is vital that you don’t just enjoy the increase in your sales. You also need to make sure that you don’t get worked up by the sales decrease either. You need to take the time to spot any trends and growth, as this will help you to strategize better, and it will also help you to better invest your time and your various other resources.
Studies have been done and they have found that competitor strength is a major challenge. It’s a common issue that you will certainly face as your business grows. Often, growing means that you have to exert way more effort to define yourself and you also need to try and set yourself apart from your competition as well. If you are a growing business and you are faced with even more competition, then you need to try and revamp your offers. You need to try and look at your features, your prices and your services. This will help you to level up to the challenges that your competition are providing you with. If you are convinced that you have tried just about everything and nothing has worked, then now would be the time for you to pivot. You need to explore another niche and you also need to try and develop your company. When you look at ecology, you will soon see that there is a principle known as Gause’s Law. This states that if two species require the exact same resources to survive, then they cannot coexist peacefully. You can apply this to your market competition too. If you want to avoid extinction, you need to adapt.