The list of challenges for Small Businesses is forever growing. There are obvious differences between industries but there are some general challenges that remain the same for most small businesses (SME's). The first step is to do a deep dive into your business and have a really honest evaluation of all elements to understand what is holding your business back from elevated success. Once you understand what the problems are then you can put together a plan to rectify them.
Here are our top 5 areas to focus on:
1. Hiring the right staff
Having the right people in your business is critical. Making the right decision in the first place is important, as the cost to retrain a new person if that one doesn’t work out can be very high depending on the complexity of the role. But then even once you have hired the right person, it can be hard to retain them...particularly if they are a millennial. While millennial's are smart and hard working, they also want to advance quickly and it is estimated that 40% of them will move on within a year of gaining a job and less than 20% will stick to a job for more than 5 years.
The future of employment is seeing a rise in contract workers. What does this mean for you? It will be cheaper and quicker to onboard people to scale up quickly. But it does make retention even harder.
Consider what you are offering people. You will need to pay well, offer good benefits and be able to show a clear career progression in order to keep the best employees.
Many small businesses aren’t using the right technologies for their business. With growing cyber security concerns, compatibility issues with your existing systems and just the sheer speed in which this area is growing technology can be a major hurdle for business.
If the decisions are overwhelming do some independent research, read reviews and see what systems other people in your industry are using.
3. Increased operating costs
Juggling the balance between increasing your revenue while managing your costs can be a delicate one. When revenue increases so do expenses, but it is not always a linear relationship. This is a time when you need to monitor your costs closely. Don’t just make decisions for today. As an example, look at your technology investment, while it might cause a spike in expenses now the idea should be that it will reduce other costs moving forward including labour costs if you can use technology to automate some tasks.
4. More competition
Competition doesn’t always have an adverse affect. In fact, sometimes it can help you see the direction you need to be going in. If you are faced with competition that is affecting your business you can do one of two things. Firstly, you can adjust your offering in some way such as changing your features, price or service to meet the challenge of the new competition. Or you can use it as an opportunity to pivot. Look at the niche that you currently operate in, is there an opportunity to dive deeper into that niche and create a more specialised offering that others can't or don't. They say a niche is an inch wide, but a mile deep.
5. Business data security
Cyber security is a major concern world wide. We also have new data protection laws that require businesses to disclose any breaches of customer data and they can face prosecution over this. So now more than ever it is within a businesses best interests to protect their data. One of the reasons small businesses are less concerned about data security is because they don’t understand how high their risk is.
Making sure you upgrade software is a key element. It is estimated that over 50% of businesses are still using Windows XP, even though it hasn’t been supported for over three years. This means that as security issues come up, Microsoft aren’t updating this software to fix these potential issues.
Consider outsourcing your data security to ensure that you have experts looking after your system. You should also consider having cyber insurance!
We understand that running a small business is challenging, and lets face it, the odds are stacked against you. But small business can be rewarding, you just need to keep your finger on the pulse and deal with some of these challenges before they cause you problems.