Whether you own a tech startup or an offline SME/B, embarking on the entrepreneurial journey means you’ll face several business challenges. Bigger the obstacle, the greater the satisfaction of overcoming it. And as your venture grows, you’ll come across newer problems, which, if solved correctly, will pave the way to new opportunities. Knowing how to avoid the biggest pitfalls is the key to success for small businesses.
Accordingly, let’s look at five key challenges hurting small businesses in 2021 and ways to solve them.
Understanding your audience
Just like in any relationship, building a meaningful, genuine connection with customers takes a lot of time and effort. But once you do, you will be able to promote your offerings to an audience that is listening, appreciative and clamouring to become your client. So, how do you get there? Well, finding customers starts with figuring out who your ideal customer is. ‘Spraying & praying’ doesn’t work for anyone; You must make sure you spread the word to the right people. Think market segmentation by geography (location, density, language, climate), demographics (age, gender, income, occupation), psychographics (lifestyle, opinion, personality/interests, values) and behaviour (benefits sought, occasion, engagement & purchase frequency). Once you have the buyer personas, you can start creating content for each audience group in the places they visit most. You must speak to them with messages that matter to them and attract them to your brand & its offerings.
Hiring the right staff
Small businesses often fail not because of a need for better infrastructure or economic resources but due to a lack of adequate personnel to achieve long-term objectives. Especially since small business executives are often understaffed, to begin with. The solution? Don’t settle for good employees when you can find excellent ones, even if that takes longer. Just as you created buyer personas to find clients, create candidate personas to achieve a suitable description for your vacancies. These profiles should be different according to the role and responsibility. But key competencies to look for are tolerance to ambiguity, context shifting, imagination, entrepreneurial spirit, managing multiple responsibilities and experience working in startups or SMEs.
Another problem that most small businesses share is lead generation – in particular, generate enough leads to satisfy the sales team. A powerful lead generation engine strategy can convert new visitors into permanent members, creating a constant revenue stream while you sleep. Now it’s true that lead generation can be time consuming and challenging, but it doesn’t need to be. Below are some effective online lead generation tactics.
- Do basic local SEO
- Publish blog posts regularly
- Guest post on relevant websites
- Get active on social media
- Leverage paid campaigns (search ads/social media ads)
- Run native advertising
- Build a referral network
- Organize offline/online events (Contests, giveaways, quizzes)
- Use email/SMS/WhatsApp marketing
- Offer limited-run deals/discounts/samples
You could also go for these tried-and-tested methods to generate leads offline:
- Direct mails/newsletters
- Print ads
- Networking events
- Inbound phone calls
- Outbound sales reach-outs
- Sponsoring community initiatives
Building a digital presence
Today, having a digital presence is no longer a benefit but a necessity. From brick and mortar businesses to e-commerce stores, every seller must be where their customers are, and now more than ever, customers are on the internet. An absence of a solid online presence keeps small businesses from enjoying numerous advantages – improves efficiency, communication and profitability, amplifies the range of customer acquisition, reduces expenses, works remotely and, among other things, helps understand your customer better. So, where to begin? Well, besides a great website, your company should have official social media accounts on Instagram, Twitter and Facebook, at minimum. If you’re in a highly competitive market and vertical, you may need to be active on additional platforms as well. IndiaMart, TradeIndia, Just Dial, Sulekha, Hotfrog, Yalwa, Grotal, Mouthshut, LBB, YellowPages – there are so many available, some of which may be specific to your industry. For small B2B, high-tech or service-based companies, having your employees integrate with LinkedIn may be valuable. The same goes for Pinterest, Instagram and Flickr if you have visually marketable products or services. Also, most businesses will benefit from sharing videos on YouTube and Vimeo. There are also ORM activities that can benefit your customers, stakeholders, investors, suppliers, employees, family, friends and business community.
Having enough cash to cover bills is a must for any business, but it is also a must for every individual. Whether it’s your personal expenses or your company’s, in the long run, one is likely to emerge as a capital drain putting pressure on the other. To avoid this problem, small business owners must not only be heavily capitalized but also be efficient at managing finances. Following are some useful steps you can take to manage your business funds better.
- Create a budget and stick to it
- Stay ahead of your deadlines
- Track your spending
- Keep your business and personal funds separate
- Cut costs to increase revenue
- Have a consistent cash reserve
- Reinvest your profits into the business
- Organize your cash flow
- Set SMART (specific, measurable, achievable, results-based & (time-limited) goals
In the end, remember that these challenges are just that – challenges, and people do overcome them. Each is a sign that your business is on an upward trajectory and your rivals are on the wayside. Overcoming these challenges will help you grow as an entrepreneur and derive more profitability. How you respond is what the “game” is all about.