Challenges are part of an entrepreneur’s journey, and so are the growth opportunities. Small business owners must overcome the challenges, many of which might seem too much difficult to deal with, but there are ways to get around it and keep the businesses ticking.
A typical challenge is a competition that small businesses face, which intensifies extremely fast. Numerous new companies sprout up every minute, and instead of looking at each business as a threat, it is better to welcome the competition as it boosts consumer demand.
It should encourage entrepreneurs to challenge their abilities in providing better customer education and produce better quality products.
This can help companies to improve sales and reach new milestones in business as experienced by the seasoned marketing veterans.
Below are some challenges that small business owners face as they strive for business growth, and they will know the ways to tackle it by going through this article.
Business is for making a profit, and it is natural that for any new business, revenue generation is a pressing issue. Every business has a gestation period before revenue starts flowing in, and in general, it takes about 8-12 months from inception to make money.
To keep the business afloat during this period, you must manage the expenses critically by scrutinizing every expense minutely no matter how small it might be.
Entrepreneurs must have the patience and perseverance to sail through a difficult time, which can even extend up to 18 months for many types of businesses.
Moreover, with growth in mind, you would require some extra hands and keep paying vendors while investing. Consider this aspect when calculating the capital necessary for a startup so that you can sustain the business for at least 18 months at the existing scale.
Cash flow management
That 90% of small businesses struggle to survive beyond five years is the result of poor cash flow management that affects one and all.
To make money from a business, owners must keep pumping in money, and unless managed wisely, it can soon go out of control and create enormous problems to run the show.
Effective cash flow management is a big challenge for entrepreneurs, and you must be incredibly careful in monitoring expenses and track every movement of money to be in complete control of the flow of cash from where it comes to where it goes.
Cash flow management is all about proper bookkeeping, which bolsters the business finances as it can impress lenders and make borrowing easy for you.
EJ Dalius suggests that you should focus on the channels that generate consistent sales and work for maximizing the contribution to the bottom line and negotiate for favorable payment terms with vendors and partners too.
Preparing for the competition
When any business tastes success, it breeds more competition. Although it might appear strange, it is real. When you are successful, it inspires many others to take the plunge and grab the opportunity, which leads to increased competition.
Many small business owners fail to anticipate the fierce competition that results from their excellent performance and being unable to respond to it lose their way.
Instead of being rattled by the competition, keep up your excellent work and do what you do best. If you can communicate your unique value proposition to customers and prospects, there is nothing to worry no matter how intense the competition might be.
Vendor and partner
A business startup is not an individual activity because you must depend on various resources like vendors and partners to collaborate with you in your efforts to realize your dream of setting up a business.
You need the assistance of different service providers to see your business take off from the ground. If you are an experienced entrepreneur and have gone through the process in some earlier venture, then you will probably have a lot of service providers with whom you have worked.
However, using those resources to start up a new venture on a small budget might not always be easy.
On the other hand, if you are a fresher, you cannot afford the luxury of going through trial and error, as errors would be much more that you cannot afford.
The solution lies in finding vendors who have experience of working with entrepreneurs who have a shoe-string budget and ready to accept the terms without compromising on the quality of deliverables.
The success of any business depends on the ability to sell the products for which there must be a good marketing plan.
Even the most brilliant idea of business may flounder if not backed by a solid marketing plan based on the market conditions. Aligning with the market reality is the most crucial task because most fail on this account.
You must understand what sells and reposition your business to meet the changing needs of the market to survive.
Embracing changes quickly and recasting the marketing plans to suit the needs of the time is critical for business survival.
The dilemma of delegation
Entrepreneurs are different from business promoters because they must stay wholly involved with the business process through, especially in taking specific decisions like hiring for critical positions and drawing the big picture with strategic planning.
However, they must also know how to run the show without dabbling in everything and instead delegate work to dependable people and trust them in making decisions that serve the best interest of the business.
Building a team that you can trust upon and allow them to act as leaders in their capacity is extremely important to free up your time from routine work and play the role of the mentor perfectly.
However, you must be ready to step in and assist the leadership team when required.
Coping with the uncertainties of business should help to learn from the failures which are bound to happen. And you must be ready to manipulate resources to take some positive actions that propel the business in the right direction.