Starting a business is a great achievement for all entrepreneurs, but sustaining one is the bigger challenge. There are a number of standard challenges each business faces, regardless of their size. These comprise of things like employing the right people, developing a client base, building a brand, etc.
However, there are a few which are strictly small and medium sized business problems. Here are the top 10 challenges faced by small and medium sized businesses:
1. Leadership
No academic qualification is required to be the leader of an SME and it is suspected that if one were given most entrepreneurs longing to get started would not do it in any case. However, given the number of challenges of leading people and running a business, many owners falter as they do not posses the right skills.
Currently there are plenty of good books on leadership to depict that the apt skills can be acquired. You do not need to be like Richard Branson to be an appreciable leader in your business; simply be equipped with apt habits and skills to make a difference for the team.
In the period of economic turbulence created by coronavirus pandemic and the ensuing recession, possessing the right leadership manner becomes even more essential as this is the time when leadership qualities will be tested at max.
2. Culture
You must have observed over the past few years that obtaining the right culture has become more essential for business owners. The motive of the business must be crystal clear and from this motive, the principles of the firm can flow.
Four principles can seemingly be the maximum anybody can keep in mind and successfully implant into a business. These are:
- Professional/ Honesty/Integrity
- Initiative/ Innovation /Self Starting
- Respect
- Customer Service/ Falling Over Backwards /Going beyond
Devote time to establish the principles and then ensure that everyone is aware of them. Then, begin to search them in the activities of the team and with the help of regular team meetings and staff appraisals reinforce the principles with the aim that they become a part of the way a business is done. In turbulent periods when overheads are to be cut it is essential to make sure that even then you live by your principles and work towards producing a resilient culture.
3. Strategy
A repercussion of a lack of leadership skills is a lack of business strategies in most SMEs. Now, there are properly documented, single page, business strategizing tools available that might really aid your business concentrate on what matters. Have a look at: Gino Wickman’s Strategyzer Business Model Canvas & Traction.
It does not take long to seize the concept and it’s time thoroughly spent conceiving about what the business requirements to achieve its targets in a period of three years and the way those ideas are to be realised. It is also very good for the development of the team if the main players in the business are engaged in the “how” of executing the strategy.
4. Strategy Implementation
Something which actually aids businesses to succeed is to be good at executing plans, ideas and strategies; being in a position to take a three-year strategy and break it down into 12 months targets, and then be concentrated and convert those into 90-day objectives.
By meeting the targets in every three months, entrepreneurs can start to gain from the marginal profits which are achieved by meeting every objective. This is something each business owner can apply because it simply means making tiny regular refinements to the business instead of thinking up a huge initiative, then attempting to sell it to the team and failing as it did not get the buy in.
5. Making your Business Emerge
Getting a competitive edge in the packed market places of the day can be an actual challenge. It’s essential for each business but needs time, resources and money to ensure the company has done every possible thing it can to emerge.
Producing a smaller business stand out in current market place can be tough but here are a few of the methods that people contend:
- Quality
- Customer Service
- Tough to buy it at another place
- Convenience (Local/ Stock availability /Delivery)
- Price
- Your expertise
If you wish to understand the worth you bring to your clients then have a look at Strategizet’s Value Proposition Canvas.
6. Developing an “A” Team
The following challenge to trip up many SMEs is getting the right people to develop the business, the teammates who ensure all functional features are delivered like sales, production, marketing, accounts and operations.
To grow and run a business productively, a managing director or owner must be detached from the distractions of running daily operations. Having a good “A” team in place truly helps this. Initially, this can be a single person who is the chief player but in the end, as the business develops, every function requires somebody who has absolute ownership.
7. Keeping employees first
If you keep your staff first, ensure that they are properly instructed, understand what requires to be attained and have the autonomy to manage their jobs, they will convey the results required to keep your clients happy.
8. Quality vs. Growth
In due course, a business might boom beyond growth presumptions. Small enterprise owners who have not strategized for this rise in service/product production and customers are likely to tumble by the wayside.
When demands for your business rise, without the correct arrangements in place, you are more probable to come up short and fail to meet those demands. This is the reason why it is important for you to scale your business up by not giving up on the attributes which helped you in becoming such a hit initially.
9. Productivity
Productivity is highly aligned to high quality processes and systems. However, it’s just not that. It’s also about awareness of whole company. Embedment of lean thinking is needed in the entire business in order to make everybody act smarter at their respective employment level.
When an issue is recognised, the team needs to go to the problem instead of sitting in meetings conjecturing about it. At times simply talking directly to the problem owner can provide an easy and quick solution. It reduces massively the complications originating from miscommunication.
10. Being Passionate
In the day-to-day grind of living, it is essential more than ever to have obsession for what you are doing otherwise your product/services’ quality suffers. Thus giving your clients a shoddy experience that encourages them to take their business at other places.
This is the reason why obsession is a very crucial component; when you are obsessed, working for 14-hours a day isn’t as huge a hassle. In the absence of obsession, you’re more probable to let your small or medium sized business fold rather than fighting for it. In the absence of obsession, work becomes one more mindless grindstone to place your nose into.
Synopsis
Being a small or medium sized business owner, understanding this one insight is important for sustaining a calm head: your contenders face the same issues as you do. Each one, regardless of the organisation they are in, are more or less in the same boat.
How you are responding to these challenges will be the “game changer” – as you achieve more success, thereby leaving your competitors by the wayside. It’s essential to remember that all these challenges are simply that – challenges and each one can overcome them.