The Struggles of Small Businesses: 5 Ways to Overcome the Barriers
When the thrill of beginning with entrepreneurship settles down and managing overhead costs and getting new clients, while simultaneously handling the existing one takes over, the real struggles of the small business owners begin.
And if you are already a pro at tackling such situations, the pandemic brings you some unprecedented challenges that no one has ever seen or imagined. For a small business, time is not much in their favour but instead of getting rattled by such challenges, small business leaders must divert their energy to overcome these obstacles and find opportunity in the challenges.
Well, easier said than done, but with the right strategy, planning, and investments, businesses can just not survive but thrive. First off, it is essential to analyze the consumer requirements in the post-COVID environment and rethink the challenges and opportunities in order to take the bull by its horns. In doing so, business leaders can seek support in technology and networking, which could help them achieve their business goals.
Enlisted here are the top 5 common struggles of small businesses and how they can overcome the barriers.
1.Increased Overhead Cost
High overhead costs directly affect profitability. Often it has been observed that the team is constantly working hard and the business is generating significant revenue yet the bottom line is not increasing. This could be a result of increased overhead costs. Generally, there are three types of overhead costs: fixed overhead cost, variable overhead cost, and semi-variable overhead cost. Although fixed variable cost includes a lot of planning and various considerations, it is the variable and semi-variable costs that cause problems,
Solution: In order to learn what part of the business is consuming the most money, businesses need visibility into the process. The visibility can be brought through digital tools and technologies. Today, there is an umpteen number of tools that have powerful features and yet are cost-effective. Using these tools, small business owners can control typical variable costs such as material, supplies, equipment maintenance, vehicle and fuel usage by employees, salaries and commission, and so on.
2. Building Consumer Confidence
For a small business, it will always be a challenge to convince customers that you are equipped and committed to delivering outstanding product or services just like your larger counterparts. It may sound a bit exaggerated, as in reality, obviously, large enterprises have more resources than a small business, but there is a catch, they have large problems as well.
Small businesses find it extremely difficult to invest a high amount of resources in branding and creating marketing noise to reach out to their targeted customers.
Solution: Marketing strategies focused on ensuring customer satisfaction at every touchpoint is an achievable task for a small business. For example, if a company is providing maintenance services, it can ensure that when a field service representative reaches the rise, he is equipped with the right tools to resolve the issue in the first visit itself, while also listening to the customer problems and attending to the needs efficiently.
Small businesses have the advantages of establishing personal relationships with customers. If the company leverages this to create upselling and cross-selling opportunities, it could easily increase the revenue and growth for the organization. Secondly, companies, from time to time, need to make their presence felt in social media to get involved in the social circles of the client. Regular, precise, and effective communication can help customers increase consumer confidence in a short span of time.
3.Revenue and Profitability Leakage
It is one of the common problems that has not spared even large organizations. To a small business, it could threaten their existence. Identifying revenue leakage is extremely difficult without the help of technology. If most of your business processes are recorded on the spreadsheet or paper, you won’t be able to find the patterns and unusual changes in the patterns. For say, if you are using paper-based processes, you will not have concrete information about your prospect behavior at different stages of the sales funnel.
Solution: To resolve the problem at this stage, you need to surrender to technology. Using the right tools could provide you with the real-time visibility into the process so that you can identify your sales funnel and operations, and get to know your prospect behavior, team efficiency, and work order status.
Today, you will find a range of CRM tools, equipped with powerful features, intuitive dashboards and affordable cost. However, before purchasing the CRM, it is essential that you browse through the top criteria to select the best CRM software for your business. It is important that you carefully analyze your business requirements and only then make a decision.
In the struggles of generating revenue and running day-to-day operations, often the compliance's are put to the backburner. The complexities of following the compliance's make businesses more reluctant, although, no way one can evade the bad consequences of poor implementations.
Besides, not having a penchant for booking-keeping adds to the complications. For a business, compliance's vary from taxation to employee compensation and healthcare and if you are struggling to follow compliance's, you are definitely not alone.
Solution: On-time record-keeping is key to following compliance's. Although it is obvious that using digital technologies will help you in following a range of compliance's and generating timely reports for reference purpose, you may first begin with ensuring timely record-keeping with whatever options available to you. Introduce a process in your operations that makes record-keeping compulsory yet easier.
The power of branding works for employees as well. Many candidates are attracted to big brands, as working for such brands gives them better exposure. Besides, there are several employee benefits including health insurance, bonus, higher salaries, and so on. Matching this level of employee benefits is quite difficult for small businesses and poor employee retention is too expensive in the long run.
Solution: Although lucrative employee benefits are always going to create barriers for your employee retention plans, there is another side of the coin that you must look at, and some statistics are clear proof of it. According to Business solver, 92% of employees are likely to stay in the company if bosses show empathy. Another statistics by FlexJobs reveals that 82% would be loyal to the company if they have flexible jobs. Small businesses can create a culture of rewards, recognition, training, and flexibility to retain their best employees.
There are tremendous opportunities for small businesses in the market today. Digital tools and technology are specifically cut to their needs so that they can strengthen their decision making and streamline operations. All it requires is smart strategies that enable them to make the best move towards growth, profitability, and efficiency.