Top Challenges Small Business Owners Face
Starting a business is a rewarding experience but it is definitely not easy. The last two years proved that small businesses face challenges that we cannot even predict. From building brand awareness and getting customers to keeping those customers and hiring the right kind of people to help your business grow and scale, you will face hurdles on a daily basis regardless of which industry you are in. Owning a local small business is not for the faint of heart but it is not impossible either. On the contrary, there are many common challenges every business faces and some you will eventually grow out of.
The City of Riverside is an exceptionally business-friendly local government. Riverside County has earned a reputation as one of the nation’s best places to work, or to start a business, including prominent businesses in the agricultural, manufacturing and distribution and high-tech industries.
If you are a small business owner or are considering starting your own business in Riverside, the market may be primed to help you reach success. There are still a number of challenges you will likely face. Before you forge ahead, you should be aware of the issues because being prepared is half the battle!
Here are some of the most common challenges you may encounter.
Money Management
Nothing can hold a business back like money problems. As a business owner, you not only have to have enough money to pay your business’s bills, but you must also have enough money to pay your personal expenses, too. While most larger companies have enough cash flow to keep up with payroll and keep the lights on, small businesses are often in a less stable situation. Whether your business or your life, one will likely emerge as a capital drain that puts pressure on the other.
If one big client fails to make a payment, your small business may not be able to cover its bills. Money management is always crucial to business success but becomes vitally important when cash is flowing into and out of the business often. In the beginning, it may be easy for an entrepreneur to handle all the accounting and bookkeeping tasks, but it is a good idea to get professional help to make sure you are not missing out on any valuable credits, or risking an audit.
Too Many Overheads
Overheads are one of the biggest small business challenges, and excessive overheads have driven many otherwise good companies to the wall. Resolving them involves paying close attention to what customers actually want and providing products or services sharply tailored to suit. This means working out what customers need and trimming back unnecessary services, or elements of products that customers are not particularly interested in. Analyzing your transactions and asking existing customers what they want is helpful. Where you add value, make sure that it does not increase overheads.
Lack of Time
As a small business owner, the temptation to do everything yourself can mean that you burn the candle at both ends. The smaller your business, the more tasks you are likely to take on yourself. You are the one responsible for executing business plans and winning new business, but you might also be answering the phones, filing the paperwork and dealing with vendors. This time crunch can be difficult to manage and can cause important matters to fall through the cracks.
Fatigue is one of the most commonly overlooked small business challenges and can leave you disorganized, forgetful and cranky, not paying as much attention to clients as you should. It also results in you making mistakes. Business owners have to pace themselves, which includes embracing strategic delegation, something that for any highly motivated individual isn’t an easy ask. You could also consider delegating tasks that are outside your skillset to specialists, such as accountants or legal experts – the results will likely be more professional and can save you endless headaches.
Trouble Finding Good Employees
Hiring the right people to help your business grow is a big challenge for small businesses because they often lack the resources to compete with larger companies. In many instances, your small business’ benefits package will not be able to compete with what large companies offer. Additionally, while large businesses can hire people for one specific task, you may need employees who can handle multiple tasks.
Instead of hiring a full-time employee, consider reaching out to freelancers and independent contractors who work on their own terms on an as-needed basis. Outsource things that you and your team need the most help with, so you can spend more time on tasks you have the know-how to do well.
Take ownership of attracting the right candidates to your company’s brand and making them interested in learning more about you. This builds a recruiting pipeline that helps to give hiring the same predictability as sales. Then, convert those leads into applicants.
Customer Acquisition and Retention
Small businesses are often dependent on their first client as they get things up and running. The problem comes when a company allows itself to become dependent on a single client. If a single client makes up more than half of your income, you are more independent contractor than a business owner. Diversifying your client base is vital to growing a business, but it can be difficult, especially when the client in question pays well and is on time. Keep in mind that customer acquisition is more expensive than retention because return customers are more likely to continue spending money with your company. They are a wonderful source of word-of-mouth – and can share bad experiences just as they can share the good.
Start by researching your customer base, and identifying the characteristics of your existing best customers (those with the highest volume of sales, and the most repeat custom). Make sure you integrate into this analysis any costs associated with particular customers, so you have a clear view of their net value to you.
Spend time figuring out who your ideal customers are. What do they like to do? Where they are spending their time online? What are their main pain points? How does your product or service address them? Getting specific can help improve your results – and guide your marketing channels and budget. Your marketing strategy will be unique based on your budget, industry, competition, and more. The more effort you put into getting it right and making adjustments based on real-time results, the better.
Difficulties Balancing Growth and Quality
It is a common story: one day you’re celebrating landing a big client, and the next day you are struggling to keep up with the new client’s needs. While business growth can be seen as a good thing, it can backfire. If the growth happens so fast it comes at the expense of quality – in terms of your product or service, customer experience, or customer service, then you will end up suffering. Sometimes your business must sacrifice to scale up.
In many instances, you have to make the choice between working long hours—and asking your staff to do the same—or finding ways to cut corners. Neither is a great solution, meaning that, ultimately, you will have to find a way to grow your business without hurting your business.
Ineffective Web Presence and Brand Awareness
Marketing, in general, can cause small businesses a number of problems. Advertising is expensive and word of mouth is slow-moving. Brands like Amazon, Toyota, Kleenex and Coca-Cola are all household names and do not need to worry much about brand awareness. Small businesses have to work hard to become well-known. The internet provides opportunities to find customers without breaking the bank, but many small businesses do not do enough with their online presence. You probably know that you need a website, but is it SEO optimized?
PR is not all about paying for media coverage – it is about focusing your brand voice and finding your place in the market. Put effort into creating high-quality blog content. It will help you establish authority and trust in your industry, while also helping drive traffic to your website and convert it into leads.
You also need to consider social media like Facebook and Twitter, and pay attention to review sites like Yelp where one dissatisfied customer can damage your reputation.
How Stance CRE Can Help You
Every challenge has a myriad of solutions. Navigating the commercial real estate market can be an intimidating task, especially in a fast-moving market such as the Inland Empire. Any commercial real estate situation can change in the blink of an eye, leaving you to face challenges that you never anticipated. And to make a sale that meets your pricing and timeline goals, there are even more factors to keep in mind.
Stance CRE can be a great resource regardless of which type of business owner you are. We have been adding value to business owners’ decisions right here in Riverside for years. We are not just market experts, we are your neighbors! We are a local business with local interests.
At Stance Commercial Real Estate, we live and breathe Riverside culture. We are not only working in the community, we live here… we love it and we want to help you succeed in it!
Call us today at (909) 772-1212 and let us help you decide which type of role is best for you!
