Small businesses form the essential core of the American economy, employing millions of Americans across the country and contributing more than half the value of the U.S. GNP each year. Unlike their competitors at the multinational corporate level, small businesses face unique challenges that impede success and threaten to shut down companies each year.
The challenges for small businesses are unique to their capabilities and capacity, but that doesn’t make them impossible to overcome. In this piece you’ll discover three key challenges that small businesses face and offer advice on how to overcome these obstacles.
Staffing and Scalability
When a large corporation begins growing, it is helped by greater access to capital resources and higher profit levels. For a small business to grow, owners and managers will need to hire the right pieces to fit their staffing puzzle. The wrong hire in a small business can have greater ramifications because of the size of the company compared to one wrong hire in a company employing thousands of individuals.
Another problem facing small businesses has to do with properly scaling the business as it grows. Small business owners need to have an accurate and detailed plan for growth. This plan should start with a short-term (6-12 month) vision and a long-term strategic vision (3-5 years) with specific goals for the growth of the business.
When small businesses are selective in the hiring process, picking only top tier talent, they’ll have the right talent in place to meet the strategic goals they’ve set for growth.
Maintaining a Competitive Edge
Most small businesses, because they operate on a regional or local basis, have a much smaller customer base to work with. This can make it challenging for small businesses to remain competitive with other players in the industry. In order to overcome this obstacle, small businesses need to excel in developing a customer-focused marketing program.
There are a variety of marketing services available today, namely email and content marketing, that are designed to help businesses maintain solid relationships with clients in their target market. Meeting the needs of customers is not good enough though; small businesses should aim to exceed the expectation of their customers in order to keep those customers loyal to their brand.
Tracking the Flow of Finances
Money is important to any company, so saying that it is more important to small businesses is a bit of an overstatement. With that said, managing finances is more important in a small business because many small businesses operate on a shoe string budget with no room for errors. A lot of small business owners and managers manage the company’s finances with a manual spreadsheet in the early days.
Over time though, it can become far too difficult to continue using a manual spreadsheet to track the finances of a growing company. Ideally, the amount of money coming and going from the company becomes too large and the client base to extensive to continue using inefficient manual spreadsheets.
However, solving the problem won’t cost small businesses an arm and a leg to evolve as the company grows. Numerous cloud-based services are available that provide small businesses with a virtual accountant. This provides small business owners with the ability to manage and track money, create invoices, analyze expenses, and easily create expense reports without having to hire more personnel or remove themselves from day-to-day operations just to manage the money.
Small businesses face challenges every day that larger corporations don’t have to worry about, but that doesn’t mean they have to let those challenges slow down growth and impact the future of the business.
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