Even though small businesses in the US generate around $ 6 trillion in sales, the biggest challenge for most of them is “survival”. About 84 percent of all new startups are out of business within four years. And if that didn’t scare you, 70 percent of the 16 percent that survive the first four years don’t survive the second four! That means, on an average, 974 out of 1000 businesses that would start these yeas won’t be around in the next 10 years. This alone is an ample proof that you are indeed in an elite group if you’ve successfully survived. Why it’s so hard for a small business to succeed?
Let’s have a close look at small business challenges that most businesses face in their day-to-day operation:
* Financial issues-These include getting billings out on time, finding adequate funding, credit management and collections. In other words, the top problem is CASH.
* Customer issues- It’s really difficult to understand what your customer wants. Finding sufficient customers for your products or services, and keeping them happy so that they don’t turn to the competitors.
One of the biggest small business challenges is to find and retain customers because they have limited marketing budget to compete with the advertising dollars of big companies.
New technologies, such as online marketing, email marketing, social media and search engine optimization are best ways to attract customers, but can be a bit difficult to handle for small businesses as they have limited budget and experience in this field.
It’s very important for small businesses to differentiate themselves from the competition so that their marketing message speaks directly to the customers. If you’re not sure about your target markets, you won’t get the customers, which means additional marketing research is important.
* Production issues-These may vary depending upon the type of business. Mostly, all types of businesses usually struggle with being able to provide want their customers need, when they actually want it and at what price. Doing this repeatedly and predictably is a big challenge.
* Growth issues-Growth brings with it a challenge of change. It’s great when you hone your skills through experience and repetition, but it’s a different game to stay on the top when rules of the game change with regard to the customer expectations, people issues, competition, finance, technology, globalization, etc.
* Limited resources-Small businesses usually lack large cash reserves, fully staffed IT functions, dedicated research departments, strategic planning functions, etc to address the opportunities or challenges.
* People issues-These includes finding the right kind of skilled people, compensating them, keeping them happy, training them, motivating them, and getting them to deliver high quality work.
At times, most of these challenges can be daunting. It’s really encouraging to note that struggles we encounter daily are quite normal. All small and medium businesses face them daily. A like real “heroes”, we continue to fight, because it’s a question of survival and the cause is worth it!