Starting a business is a big achievement for any entrepreneur but maintaining one is the harder task. According to the U.S. Bureau of Labor Statistics, about 20% of small businesses doom in their first year, 50% go under by the end of their fifth year and 80% fail before they reach their tenth year.
With survival rates like that, it’s easy to understand why folks live the first few years of business with dread. But in fact, many common small business challenges are actually fixable. All you need to do is take a step back, understand the pain points you’re feeling and rethink your strategy.
Here are 4 problems every small business faces, along with some tactical advice about how to fix them.
1) Finding Customers
Getting a customer to your doorstep is not just a small business problem. Even the biggest brands have to work hard every single day to get new user base.
But for small businesses, that aren’t a household name, finding a client base can be particularly difficult. But how to know what to prioritize and where to allocate resources?
How to Fix It:
Finding customers starts with figuring out ‘Who your ideal customer is?’ Spraying and praying doesn’t work for anybody — you need to make sure you’re spreading the word to the right people.
Craft your ideal buyer persona — an idea of what your target customers look like, what they do, where they spend time online. Creating very specific ones can improve your business results dramatically.
Once you’ve built your buyer personas, you can start creating content and start building customer loyalty by getting in front of your target audience in the places they spend time at.
2) Hiring Talented People
Hiring is often one of the biggest challenges for small businesses, especially since most startups are under-resourced to begin with. Hiring new employees is a big deal and a complex process, and the cost of onboarding is an average of over $4,000 per new employee for most companies. If you don’t hire well, employee turnover can be very, very expensive.
How to Fix It:
It’s easy to hire with a short-term mindset: send out a job description, screen applicants and make a decision. But because of the high costs of hiring right, it’s important to invest a significant amount of time in the hiring process.
Don’t settle for good employees when you can find great ones, even if it takes longer. It’s the great employees that will help your business to the next level. Just like you create buyer personas for your customers, create candidate personas — a different one for each new role but should share some underlying traits around company culture.
Next, take ownership of attracting candidates to your brand. Engage them using social media and make them interested in learning more about your company.
3) Spreading Brand Awareness
We are sure you have wondered how some brands seem to pop up out of nowhere and become a success overnight. Is unrolling your brand that easy or is it a myth?
How to Fix It:
Any business owner will tell you: Overnight success can happen — it just takes 5 to 10 years of work first. Brands like Uber, Pinterest and Feedly may seem like an instant success but their hard work, failures and rejections happened behind the scenes. But there are strategies for spreading the word about your brand and building a great reputation that you can start right away.
- Social Media
While your business may benefit from using social media to reach out to your buyers, these platforms can be used to build and strengthen your brand image too. One such channel is Snapchat. With more than 6 billion daily users, more and more brands are gravitating towards the app considering the attention it gets.
Kylie Cosmetics is an apt example of how to build a business empire out of social media and fan worshiping. Her massive AND obsessive audience of millennials and teens made her brand a success online and offline.
If you want to make your small business go BIG, then public relations is your thing. PR is less about paying for a spot in a news blog and more about engaging with potential clients and having right connections. Include influencer marketing in your PR game.
Influencers represent marketing leverage. For every influencer you “influence,” their opinion impacts dozens (or hundreds or thousands) of others in the most personalized manner.
Running a consistently high-quality blog will also help you build brand awareness. Not only does a blog help drive traffic to your website and convert that traffic into leads, but it also helps you establish authority in your industry and trust among your prospects.
Another great way can be guest posting. However, run-of-the-mill content won’t cut it – you need to be guest publishing high-quality stuff. Create memorable, valuable content and you’ll be introduced to new audiences and make a lasting impression.
4) Slumping Cash Flow
Last but not the least, money (or the lack thereof) is one of the most common reasons why so many startups wind down. Studies have shown that 80% of all small businesses and startups fail because of poor cash flow management.
How to Fix It:
Managing cash flow is one of the most important responsibilities of an entrepreneur. There are many emerging businesses out there who don’t have the luxury of millions of dollars in VC backing but survive on highly effective and foolproof cash flow management practices.
Startups need to play a safe and cautious hand when it comes to spending their funds. Maintain lines of credit to tide over your short-term cash crunch, but keeping a close eye on your long-term profitability will ensure that your overall liquidity is not threatened by the rainy days.
Also, taking help from a financial consultancy firm may really help you out of your financial crisis.
The Bottom Line
These are challenges, but not death sentences. One of the worst things a would-be business owner can do is to go into a small business without considering the challenges ahead. We’ve looked at some things that can help make these challenges easier, but there is no avoiding them. But 42works is always here to help you with your business strategy to help you overcome those startup blues.