Nobody ever said that starting a new business would be easy. Taking on a start-up project requires a great deal of vision and determination. Luckily, you have both. Great! You're ready to face any small business challenges that come your way. Look out, world!
There's just one problem: you have no idea what kind of challenges your small business might have to face. I mean, you know that starting a business is hard, but nobody has really told you exactly what kind of difficulties you'll be up against. Thank goodness that going in blind isn't your style, and that you've found this handy blog post to help you determine exactly what small business challenges you'll have to overcome. Your prep work indicates that you're already off to a great start.
1. Starting Out: Money, Money, Money
Unlike large corporations that are often backed by other companies or by incredibly wealthy individuals, small businesses don't usually have the advantage of starting out with a lot of funds. Unless you began your business with the intention of bankrupting yourself, you need to take some steps to manage your business's money. Managing finances is only one of the challenges faced by small businesses, but it's arguably the most important challenge when getting your company off the ground.
So what are your options for funding your start-up? There are several, but there are only a few good ones:
(1) Don't attempt to start your company until you've saved enough money to fund it. This is the ideal situation: no loans means no interest, and no interest means less loss if things don't work out. However, this isn't a realistic goal for most people; how are you supposed to support yourself while also saving enough to support a business? Life is expensive. Of course, you can always live in your parents' basement and save until you're 35 . . . or you can check out the other options on this list.
(2) Apply for a bank loan. The advantage here is that there may be some flexibility in how long you have to repay the loan, depending on how much money you borrow. The downfalls? Bank loans tend to have higher interest rates than some other options, and you're going to need a good credit rating for any bank to approve you for a large business loan. The process of applying for a bank loan can also be quite lengthy. While bank loans are definitely worth investigating, make sure you check out all your needs and options before committing to anything.
(3) Consider an online lending site like Kabbage. The benefit of using Kabbage is its speed: within a few days of applying online, you may very well have your funds in hand. Kabbage also boasts a relatively low interest rate. Keep in mind that, when borrowing from an online lending site (versus a traditional bank loan), the repayment period is often shorter. You must be sure that your business plan will allow you to earn enough to pay back the loan on time.
One of the financial challenges faced by small businesses is that they don't tend to show a profit for at least a few months after start-up, if not longer. When planning for your business's financial future, don't forget about yourself: you have to live, and this may mean living off savings for a while if you don't have any other source of income.
Another thing to keep in mind is that you don't just need money—you need a plan for that money. You should know exactly where money needs to be spent before you acquire a loan or spend your own savings. If you don't know anything about managing money, find someone who does.
2. After You Get Going: Attracting Customers
Now that you've learned about managing money, it's time to learn how to attract customers—otherwise, you'll have no money to manage! Yet another of the many small business challenges, attracting customers is tricky without funding—tricky, but not impossible. Here's some advice about how to attract customers to your small business:
(1) Never underestimate the power of a local customer base. If you're based in a small community, take advantage of the local camaraderie and culture. I'm not suggesting you harass all your Facebook friends with constant posts about your business; rather, I'm saying that you should look into other local businesses and advertising opportunities to see if there are places for the services you provide. Word of mouth surely doesn't hurt, either.
(2) Create and market to buyer personas. Don't try to sell your product or service to everyone—you'll undoubtedly fail. Think very carefully about who would benefit from your business and market to those people.
(3) Don't neglect your Internet presence! Even if you aren't an online company, your website and social media pages need to be stellar. One of the challenges faced by small businesses is building up enough of a web presence to be discoverable on search engines—a goal very worth achieving.
(4) As touched upon in the point above, you should learn everything there is to know about content marketing and search engine optimization (SEO). This knowledge will teach you how to attract customers by following through with leads as they make their way through the sales funnel.
3. Sustaining Your Business: Keeping Customers You Already Have
Yet another of the many challenges faced by small businesses is retaining customers. It can be difficult for small businesses to compete with large corporations, many of which are often able to offer better prices for similar services. What those corporations can't usually offer, however, is a personal touch. Here's how you can use that to your advantage to help overcome this small business challenge:
(1) Make sure your customer service is flawless. Be sure to follow up with people after conversion, and make sure all unsatisfied customers are directly—and politely—addressed. Being known as a nice company can go a long way!
(2) People love feeling that their concerns are being heard and addressed by a real human being. Treat your customers and site visitors like the humans you know they are, and let them get to know the faces and voices behind your company's operations.
(3) Stick to your brand. Whatever approach you've decided to take with your company, be sure to stick to it consistently throughout your marketing material and web copy. Being a small business will sometimes work against you, but when it comes to your brand's personality, size shouldn't matter.
4. Growing Your Business: Letting Go of the Reins
One of the small business challenges that no one talks about is the huge adjustment needed to expand your company. When you're starting out, you'll be able to head most major areas of your business––indeed, you'll likely need to do so for financial reasons. However, when your business starts to grow, you'll have to relinquish some of your earlier control. Here are some ways to do that:
(1) Pay attention to the skills of each of your higher-level employees. What do they excel at? How much do you trust their judgment?
(2) Give your employees opportunities to make their own decisions, and then see how they do. Start them with smaller-scale projects, but be sure not to micromanage those assignments. How will your employees ever be able to show you what they're capable of if they aren't given the opportunity to do so?
(3) Create a great work environment that encourages people to reach their full potential. Do your research about things like work–life balance, flexible schedules, and office culture. If your employees feel valued, they will work harder, and they will be less likely to leave your company for another. If you're going to delegate tasks, you want to delegate to people you know are committed to your business.
Now that you have an idea about what kind of small business challenges await you, it's time to do some more in-depth research. I recommend creating a plan for each business component mentioned above: finances, marketing, brand consistency, retaining customers, and employee satisfaction and performance. The more you know, the less these challenges will feel like hurdles and the more they'll feel like small steps you must take to reach your ultimate destination: a successful small business.
Image sources: StartupStockPhotos/Pexels.com, Negative Space/Stocksnap.io, StartupStockPhotos/Pixabay.com