Times are tough for small & medium businesses in INDIA, who are facing issues that are unique to their situation in a booming economy, with the advent of big players like Walmart, Amazon, Starbucks etc… There are a number of key small business challenges which recur over and over in business forums as major problem areas, such as cash flow, customer acquisition, and marketing.
As every small business owner knows, the reality is that there are dozens of issues lurking out there – however, we’ve had a look at seven of those you can take definite action on and set out ways to conquer them. Let’s get to work!
- Cash Flow Issues
Money problems in their various forms are top of most lists of company woes, and for small businesses the major worries are clients stalling payments, unexpected outgoings, and outstanding bills that won’t wait to be paid.
Using online invoices and reminders is also a powerful way to persuade reluctant clients to part with money. There are great software’s available out there that can do this for you, which provides free invoicing and can accept payments and automatically charge clients. - Tiredness affecting small business owners
It’s tempting to try to do everything if you’re a small business owner, and long hours add pressure. Fatigue, one of the most commonly overlooked small business challenges, can leave you disorganised, forgetful and cranky, not paying as much attention to clients as you should, and making mistakes.
Business owners have to pace themselves, which includes embracing strategic delegation, something that for any highly motivated individual isn’t an easy ask. Start by identifying business elements that don’t require your expertise, such as mailing, and take on an assistant, even part-time, to help out – after all, it’s an investment that frees you up to do what you do best!
You could also consider delegating tasks that are outside your skillset to specialists, such as accounting or marketing – the results will likely be more professional and can save you endless headaches.
You could also invest in automation of simple functions, for instance by using, financial management solutions or customer service apps
It’s important to get on top of these things, because taking time out is critical for your health and wellbeing, not to mention family relationships. Get into the habit of segmenting your day – analyse when and how you work best, the time you’d like to put into leisure or family, and create schedules that identify key activities and how long they’re likely to take. - Finding and Retaining Profitable Customers
There is a business adage that you need customers with a problem only you can solve, and it’s for you to identify that unique selling point and communicate it clearly to your would-be customers.
You can start by researching your customer base, and identifying the characteristics of your existing best customers (those with the highest volume of sales, and the most repeat custom). Make sure you integrate into this analysis any costs associated with particular customers, so you have a clear view of their net value to you.
Once you’ve done this you can focus your energies on attracting new clients from your most profitable segment, carefully differentiating your offer to ensure it appeals directly to this type of customer.
To understand what customers, want, you can ask for feedback from current best clients, which also counts as part of your follow-up engagement – another ‘must do’ when you’re looking at keeping valued partners. Find out what forums or other types of social media these customers use, and make sure you’re in there and taking notes. - Motivating Employees
Employee buy-in is very important for small businesses in particular, as there tend to be fewer of them and apathy has a greater impact. There’s a real need to understand what employees want (other than their salary), and there are a few possibilities to boost employee engagement for when this isn’t an option.
Ensuring employees are happy and productive means communicating clearly, and being approachable. Good companies foster a relaxed atmosphere where staff feel able to talk to management. Perks like free tea and coffee, free biscuits or fruit, and staff Diwali / Christmas parties cost relatively little and can really help create a favourable impression. You should also ask for employee feedback on their needs – this is not an option, it’s a must.
Too many businesses don’t look at what their employees want, assume everything is fine, then wonder why they have a high staff turnover. Don’t let these common small problems sneak up on your business too. - Having Too Many Overheads
Overheads are one of the biggest small business challenges, and excessive overheads have driven many otherwise good companies to the wall.
Resolving them involves paying close attention to what customers actually want and providing products or services sharply tailored to suit. This means working out what customers need and trimming back gold plating or unnecessary services, or elements of products that they won’t use or aren’t interested in. Analysing your transactions and asking existing customers what they want is helpful.
Where you add value, make sure that it doesn’t increase overheads (for example through well-judged deals on less-popular products, or other offers that benefit both you and the customer). And don’t forget to ask yourself hard questions, such as whether you need that new car or printer, or whether it’s just for show… - Staying Current
Small business owners can be so busy they forget to keep up with what’s current in their sector. It takes so much time just to keep on top of the work that blue-sky thinking can seem an unnecessary burden. Nevertheless, you need to keep up. When you’re scheduling your week, don’t forget to allocate time to track competitors and undertake awareness-raising activities such as reading (or writing) blog posts. Create Google Alerts, use Twitter hashtags to keep up with what’s trending, and mine the wealth of free, and very targeted online information out there on sites. If an event is really important, you could also investigate becoming a speaker, positioning yourself as a thought leader among your peers. - Seamless shopping experience for Customers
Seamless shopping experience across channels: Customers are increasingly using digital platforms during various stages of the purchase cycle be it to explore, purchase or receive. As result, retailers require consistency in branding, product / service offering and shopping experience across all channels – physical and digital.
The need of the hour for retailers is to have enterprise-wide IT systems linking front and back-end operations to help provide real time update on inventory levels, track customers and link product transactions across all channels.
Expand ecosystem partnerships: Technology is progressing at a rapid pace and retailers, even the largest ones, are not equipped to handle all aspects on their own, Retailers need to build partnerships with technology providers across key elements of the retail ecosystems. These include:
IT systems providers: To enable cross channel consistency, payment system management and robust data security
Social media analytics: To track customer and industry trends
Big Data Analytics: To derive meaningful insights and inferences from all customer data collected at various stages, including POS data
Online market places: Especially for family-owned independent stores looking to expand their customer base and reach
Increase two-way engagement with customers: In today’s highly connected world customers demand instantaneous responses to feedback. Retailers need to manage the needs of customers swiftly and proactively. Retailers can take the following steps to help them achieve this:
Measure customer feedback at each stage of the collective shopping experience. Set standards to meet customer expectation, especially on social media. For example, 40% of all social media posts should get a response within one hour
Have a dedicated customer response cell, especially for social media. Showcase actions linked to customer feedback. There is no denying the fact that advancements in technology have posed new challenges for traditional retailers. However, it has also opened up potential growth opportunities that didn’t exist before. If retailers refuse to adapt the hurdles will only get bigger and tougher, but if they do the opportunities will do as well.
NOTE: By using the techniques and methods suggested by Retail Performance, small and medium Retailers can establish their own Niche within their community and needn’t worry about the presence of big players such as Walmart, Amazon, Starbucks etc…
