As the owner of a small business, you might not know the challenges and problems that you are going to face when your business starts growing. These problems are inevitable, irrespective of whether you are selling products or services or both. Let us go through some of the most common problems of small business and try to find solutions to them:
Problem 1: Business Idea
The most common dilemma that most small-time business people go through is choosing the right business according to their local market. While it is important to choose a business that has sufficient demand in the local markets, you should also be aware of the competition that you are going to face while choosing a business that is too common in your area.
As a small businessman, you would want to face minimum competition, especially when you have just set up an enterprise. Therefore, it would not be a bad idea to start something new and innovative after confirming that there will be plenty of people who will be interested in buying your products or services.
Problem 2: Company Registration & Funds
After deciding which business you would want to start, you will also need to purchase raw materials, find a proper store and workshop, hire a few workers, and manage many other things. You will need funds to manage all these things but do not forget to register your company first.
For registering your company name, you will need to consult an attorney and follow the due procedure. After that, you might need to secure a loan from the bank to accumulate enough capital to start a business. It would be better if you could source some funds from your friends and family because they will not charge a heavy interest from you.
Also, considering that you are about to start a small business, you will not need a huge capital. Therefore, it is also a good idea to accumulate the capital on your own through a job or by doing other small businesses that don't require an initial investment.
For example, if you have an idea for starting a car garage but don't have the required funds, then you can start by offering simple services like car-washing and maintenance that require minimum funds.
Problem 3: Cash Flow
Don't invest all the accumulated funds at once because you would also require some extra funds to bear the expenses of the initial few months. It is because the first few months of your business won't provide you with enough profit straight away and you may also suffer some losses initially. That being said, it is not possible to save enough money for regular expenses on most occasions.
Firstly, you must ensure that you do business with honest and reliable people because only then you would get paid on time. Conduct a little research before entering a contract with your clients. Also, you should raise an invoice regularly and ask for an upfront payment whenever necessary.
Instead of taking raw materials on credit, ask your clients to pay a percentage of your charges in advance because that will reduce your liability. Most business people understand the plight of a small-time entrepreneur and won't mind paying something in advance provided that they trust in your work ethics and credentials.
Some entrepreneurs consider it better to continue their existing jobs before settling in business. It is a good idea because it will take away the burden of your expenses. However, focussing on business is also important, and if your job doesn't permit you to stay focussed, there is no point in starting a business.
Problem 4: Competition
Let's assume that your funds and cash flow are in place, and even your business is picking up pace. At this point, you will start understanding the influence of your competitors on your business.
There will be many established businessmen who would try to crush small businesses through comprehensive marketing and other strategies. They might also adhere to some unethical ways to snatch your deals from you. Therefore, you should be aware of these risk factors before setting up a business.
The best solution would be to focus on your strategies and innovative ideas then worrying about competitors. However, it would help if you also kept an eye on their working style and way of managing things. There would be some good things to learn from them.
Be friendly with your competitors and avoid answering up front because that might create new business rivals for you. The most successful businessmen are often the most well-spoken and humble individuals who treat everyone respectfully. Learn from them, but don't shy away from implementing your ideas with confidence so that your business keeps growing and shining every day.
Also, you must try to extend your customer line through smart tactics. For example, if you own a paint shop, then you would sell paint accessories and equipment as well. However, if you also accept painting contracts and promote that through various channels, then the painters and contractors would avoid buying raw materials like paint, paintbrushes, etc. from you.
Therefore, a better strategy would be to operate as a paint shop and accept orders from others silently by word of mouth publicity. Once you have earned a good reputation in the market, none of your competitors would be able to challenge or interfere with your deals and business.
Problem 5: Hiring People
Even a small business requires few employees and therefore, you would also need someone to take care of your accounts, invoicing, pitching your sales, etc.
It is a great thing if you find a few individuals who could handle multiple tasks easily. It is because you might be able to afford the salaries of several individuals at once. Also, see to it that you take care of some work by yourself to reduce the burden of your staff.
Keep a nice blend of freshers and experienced candidates because you would also need some talented and experienced professionals to train others whom you have hired as freshers.
Problem 6: Finding Customers
Finding customers is a challenge for every kind of business. Apart from local advertising, you could use simple platforms like Facebook and Twitter to find customers at the start.
Don't focus too much on advertising as you would need to spend extra money for that. Instead, learn how to use social media platforms to extend the reach of your business.
Problem 7: Managing Time
Most startups fail because they are not capable enough to manage time. Therefore, it is essential to learn time management skills to become a successful businessman/businesswoman.
Maintain a diary and list down all the things that you have covered every single day. Set weekly and monthly goals to complete your tasks on time. Try to complete the work of maximum clients in a predetermined timeline so that you can take up new assignments in the coming days.
Don't underestimate yourself because you have just started a business. Success will surely knock at your door if you keep working hard by learning new things and by applying a thought before every action.
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Q. Can small businesses afford outsourcing tasks?
Ans: Yes, if they do not have sufficient time and workforce to complete a task, it is better to outsource it rather than leaving it incomplete and spoiling the reputation in the market.
Q. Should I start a small business with multiple partners?
Ans: No, it will be convenient to start a small business on your own because you will not be dependent on others for your growth.
Q. What to do if I'm not able to decide what to sell?
Ans: If you are not able to decide the products that you are going to sell, it is better to take the help of a market researcher.
Q. What can I do before starting a small business?
Ans: Meet some established businessmen who have had modest beginnings and discuss your ideas with them. Take their advice and offer your expertise in return whenever they require it. It would not only help you find guidance, but you might also end-up gathering the resources and capital that you would need to commence a business.
Q. Can small business people afford marketing services?
Ans: Maybe not, but they can also hire a fresher or freelance marketer who charges a low amount in exchange for his services.
Q. How can I manage time efficiently?
Ans: Minimise the iterations, eliminate the tasks that aren't needed, and delegate the tasks that don't require your participation to manage time efficiently while running a business.