It has become more popular for individuals with a passion to transition into entrepreneurship by starting their own business; However, they are confronted with many challenges as they work to maintain growth. From the book “Good to Great” authored by Jim Collins, we are aware that most companies are good, but only a small handful of companies are great. The managers should strive to make the leap from good to great. During the process of striving for excellence, there are similar challenges every company will face. Small business owners are often confronted with special challenges, which include sales, marketing, service delivery, finance, talent management, and even the entire startup process of evolving from new to successful. Here, we summarize three typical challenges faced by the small business.
Performance and Efficiency
The shortage of qualified employees may be one of the causes of poor performance and efficiency. Some small businesses are family-owned and operated enterprises, and they are prone to problems in employing outside people. One of the reasons could be that candidates think the platform is too small to play a significant role. In addition, lack of initial capital or consistent cash flow will lead to low performance and employee retention. Compared to big businesses, small businesses are sometimes faced with insufficient initial capital investment, inconsistent cash flow and high asset-liability ratio. Once the capital chain is broken or is fragile, the company’s production and business activities will be severely affected. Generally speaking, small and medium-sized enterprises seek refuge in being hired by large-scale enterprises, to support production or service delivery. This approach does not require high-scale production and management, and thus capital becomes less of an issue.
According to the survey by Nick Spence from Brand Buddah (www.brandbuddha.com), 72% of marketers said branded content is more effective than advertising in a magazine, and 77 % of B2B marketing leaders said branding is critical for growth. However, only 32% of small businesses invested in effective marketing. Due to a lack of awareness of branding, small businesses don’t pay enough attention to brand marketing. However, instead of lagging behind in a branding plan and development, a company should build up a brand step by step with growth and development. On the other hand, many SMEs’ (subject matter experts) perception of brand marketing only stays at the level of advertising for the brand, ignoring the entire concept of branding, that is, the brand has created an emotional bond between marketers and commodities. Chief Branding Strategist Natasha Davis, states “when the small business community, specifically the micro-business community understands that branding is the reason why a company is preferred and profitable they will stop under utilizing and under funding it.”
In reality, it isn’t hard to start a profitable business, but it is hard to maintain one. Some small businesses will encounter bottlenecks when they reach a certain stage, which could be a result from certain factors spanning from lack of planning to lack of focus. Firstly, the company’s over reliance on a single client will determine the upper limits of revenue. For example, if income is mostly derived from a single major customer, the company will face great risks and instability when that client chooses to do business with someone else or begins paying late. All too often in small business are resources limited or poorly diversified. For the profit growth of the enterprise, planning and using internal resources to determine long-term stability and the most suitable growth rate and the best growth rate of the enterprise should be assessed frequently. In general, specific factors that affect maximum growth rates and profits include high operating costs and low profit caps.
So then, the next thought is how does one make the leap from good to great when running their small business? Considering the challenges that small businesses face today, solutions to solve these problems are imperative. The most important goal is to maintain the interest and enthusiasm of the major shareholders—customers, retailers and team members. This will create the driving force for new and consistent business development in a short period of time. Small business owners who are actively seeking to improve these three common challenges are attending the Branding, Profits and Wine Business Summit on June 28th 2018 in Atlanta, Georgia to find out the answers.
In addition, this two-day high performance event for CEO’s and business leaders who need to get more out of their brand are also learning how to maximize the use of lead generation and how to create products that will self liquidate. Event details may be viewed online by visiting https://www.BrandingProfitsAndWine.eventbrite.com.
Andrew, B. (2018). 5 Biggest Challenges Facing Your Small Business. Retrieved from https://www.investopedia.com/articles/pf/12/small-business-challenges.asp