9 Business Challenges Small Business Owners Experience

9 Business Challenges Small Business Owners Experience

Some business owners think that after attaining a certain level of success, the problems stop coming and everything’s smooth sailing from then on.

This really isn’t the case.

You will face different challenges at every stage of growing your business. The key here is to clearly and quickly identify these problems as soon as they pop up and then resolve them efficiently.

It’s when you know how to define business problems and find the right solutions, that nothing can hinder you from achieving your goals.

Identifying current issues and preparing for potential problems increases the likelihood of your success. So while this means your business will inevitably face some rough tides, it will equip you better with handling any storm.

How to overcome 9 common business challenges as a small business owner

Majority of small business owners will face some (if not all) of these challenges at some point. What’s important is identifying the problem and applying the best solution.

1. Understanding and planning for fluid government regulations (i.e. off the back of COVID-19)

Government regulations reflect the current events that impact the whole world. Recently, they’ve become more fluid in response to COVID-19 — either implementing or reducing stricter laws, depending on local, national or global status.

As it is, government laws and regulations greatly impact business operations. They affect the stability and growth of the entire marketplace. For example, tax and duty exemptions can increase growth and interest from investors. But a higher tax rate for specific materials may decrease production.

As a business owner, you need to be knowledgeable of government regulations you must adhere to. Some laws may only apply to certain jurisdictions. The most common regulations a business owner needs to know about include consumer law, fair trading law, product liability regulation, and environmental legislation.

When a business owner understands government regulations and is updated with current events, it’s much easier to prepare contingency and recovery plans before laws start fluctuating again.

2. Acquiring new customers and retaining loyal customers

After establishing your small business, your next step should be using customer acquisition and customer retention strategies to build your audience.

New or inexperienced business owners will prioritise either acquisition or retention, not realising that both are equally important in your business’ success. If you only focus on acquisition, your old customers will feel neglected. If you only focus on retention, you won’t be able to reach a wider audience.

Identify the acquisition and retention strategies that best suit your business. For acquisition, this includes understanding your target customer, utilising the right channels to reach them, and providing referral programs that will entice them to try the brand.

Retention strategies include investing in customer service training so you consistently provide high-quality service, providing loyalty or rewards programs, and maintaining excellent overall customer experience.

3. Increasing brand awareness

Businesses will encounter a lot of problems when there’s a lack of brand awareness. This includes low rank on Google, low engagement with consumers, or even wrong perceptions of your brand identity.

When you increase your brand awareness, you create stronger associations and connections with the audience. Loyal customers will become advocates of brands they love (i.e. when customers call themselves “Nike people” or “Apple people”).

For you to build brand awareness, you need to implement strong content marketing strategies that will humanise your business. People are drawn to compelling stories, and if you use the right channels then you’ll reach the right audience.

4. Generating leads

For a small business, generating leads with high quality in high quantity can be overwhelming.

Lead generation is one of the most important marketing objectives. A successful lead generation process turns your website visitors into potential audience and eventually into actual customers.

It can be difficult to identify the right strategy that will attract leads. For small businesses, understanding your customers and offering engaging content will go a long way.

Ensure that all your content (from blogs and social media posts to e-Newsletters) lead to the same landing page. This will attract more visitors to your website.

5. Managing the business cash flow

Cash flow issues usually occur when business owners experience new growth. Because you’re expanding in many ways, you also gain new costs. But if you don’t handle cash flow problems immediately, it can cause major business interruptions.

Some of the most common issues include late payments and receivables, tax filings, or even undervalued products and services.

A great way to handle your cash flow is creating a solid financial framework. This ensures you’re on track with your financial goals. It also allows you to plan and review your profits and losses.

Remember to schedule payments and receivables so you don’t incur penalties. Establish contingencies for any loans to minimise risks. If necessary, hire a bookkeeper or certified accountant so you can focus on other aspects of your business.

6. Improving business systems and processes

There are several signs of inefficient processes and when they pile on top of each other, it can cause major organisational problems.

Poor systems integration indicates that there’s a  lack of standardised solution and that employees often shift between disparate sources of information or data.

Bottlenecks happen when team leaders start micromanaging and are unable to adapt to more efficient technologies.

Another symptom of inefficiency is duplicate processes, wherein the team often repeats steps because there’s a lack of system or collaboration.

Improving systems and processes will benefit your business because it improves your operation (and by extension, your bottomline). Ensure that you systemise your business, adapt to relevant technologies, and strategise better solutions with your team.

7. Scaling for continued business growth

Growing a business entails that revenue increases as costs for resources increases, while  scaling means revenue increases faster than a business owner’s need for increased resources. Strategising your scaling can make your business more efficient.

Scaling allows you to handle the eventual growth of business (such as increase in sales or output) without suffering in other areas. This includes employee turnover because of heavy workload and lack of product output to meet the demands.

A business owner can start scaling by identifying milestones, learning management skills, establishing standardised processes, and practicing strategic decision making (i.e. don’t hire additional employees too early or introduce too many new products/services at once).

8. Missing work-life balance

There’s an increasing lack of work-life balance for business owners and the rest of the team. And it’s a fairly common problem for new small businesses and start-ups.

But working more doesn’t necessarily mean more things are accomplished. According to Harvard Business Review, managers couldn’t tell the difference between employees who worked 80-hour weeks and those who only pretended to.

In fact, a workaholic culture only serves to lower the productivity and morale of the entire team, including yours. Studies show that there’s a strong link between overworking and poor health — from depression and sleep disorders to diabetes and heart diseases.

As a business leader, it’s important to prioritise and schedule tasks amongst your team. Create a defined routine with hard stops at the end of each day. And remember to make time for yourself and your loved ones.

9. Overcoming founder dependence

How does your business function when you’re away? If your answer isn’t “business as usual” then you have a case of founder dependence.

Many new small businesses suffer from founder independence, wherein operations and output stop functioning efficiently when the owner/founder is temporarily away or unavailable.

If this dependence isn’t addressed, it will affect the overall growth and productivity of your business.

It reduces the value of your business because only the owner completely understands how everything works. It also increases the likelihood of employee turnover because the team isn’t given opportunities to develop their skills and decision-making capabilities.

A good business owner should learn to delegate tasks and build a managerial team (especially when your business starts growing). Learn to let go and stop micromanaging.

Small business owners will encounter different challenges as they grow their business. What’s important is clearly identifying the problem and then quickly resolving them. Book a call if you need help with the business challenges you’re facing.