No one can deny the impact of small businesses in Australia’s growing economy. Startups and small enterprises account for about a third of local production and half of the employment of the private sector.
Despite the country’s thriving economy, survival is still a problem for small businesses. Faced with a number of challenges, many of these ventures end up folding because of financial troubles and poor strategy planning and implementation.
Capify supports SMEs and makes small business funding simple. Apply today for $5K to $300K and get funds in days.
Now, let’s talk about the 5 challenges commonly faced by SMEs and what the viable solutions are to overcome these.
Keeping The Right Customers
Business owners understand that to make money, you need to have paying customers. So how do you find customers? Throw in a good product and watch the dollars roll in, right?
It sounds simple enough. But the truth is the world is filled with great products and ideas that people just don’t patronise. And the sad fact is that it doesn’t just boil down to competitive pricing or discounts, it’s more a matter of target marketing.
Finding customers is winning half the battle. A good product, no matter how new it is, will find its way to at least one customer. But while one-time buyers will bring in money, what is more important is to have a wealth of lifetime customers. You can do this by determining your target market and creating a plan that will address their interests and changing needs. Once you know who you want to offer your goods or services to, create a mailing list, offer discounts to loyal customers, and consider giving out coupons every now and then.
Creating A Business Plan
Even the most novice of business owners know the importance of a well-crafted business plan. Not only does it act as a blueprint you can follow to ensure your business’s success, it also lets you keep a tab on your organisation’s growth and missteps. When faced with prospective investors, you can even use it as a type of résumé that would give them an idea of what your company is about. And yet, despite being a must-have, many entrepreneurs forget to craft one. This leads to a lack of focus when it comes to financial management and project execution. It can even cost you customers when the quality of your products or services begin to slip.
Don’t let the absence of a business plan stop you from gaining insights on how to improve company operations. Every week, take the time to sit down to write and update your business plan. If the plan you’ve written is solid enough, you can even use it to pitch to future investors.
Running A Cost-efficient Business
Benjamin Franklin once said, “Beware of little expenses. A small leak will sink a great ship.” This is especially true when it comes to business. Many business owners discover, to their bafflement, that despite selling a large volume of their products, they’re still facing break-even, or worse, a loss. Upon closer inspection, these entrepreneurs find that the major drain on their finances is actually an accumulation of minor expenses.
If this is one of the problems your business is facing, then what you have to do is to operate in a more cost-efficient manner. This means taking a closer look at company operations and finding ways to minimise cost without affecting productivity and product quality.
Securing Employee Loyalty
These days, it takes more than just a raise and a promotion to ensure employee loyalty. Workers want to be in a workplace that value their contributions. They want to feel motivated and appreciated. Unfortunately, many small business entrepreneurs are at a loss when it comes to providing the social and psychological fulfilment needed by their employees. What happens is that workers remain dissatisfied. They start to see their jobs as ‘pit stops,’ and immediately leave once a better opportunity comes along.
So, how can you secure employee loyalty? It starts with creating a culture where there is growth and where employees feel valued. This not only shows that you value their expertise, it also encourages employee involvement.
Not Realising The Importance of Business Loans
The word debt is enough to send a shiver of fear down the spine of the hardiest of startup mavens. This fear is what pushes them to rely fully on household assets for small business funding. Somehow, many of these brilliant businessmen have started equating small business loans with debt, when it’s really not the case.
The truth is that having limited funds can inhibit the growth of a small business. Many entrepreneurs who refuse to ask for financial help wind up breaking the bank and collecting crippling debt. In fact, out of the 294,210 new business ventures that opened in Australia in the 2010-2011 financial year, only half of these businesses were still operating in 2014. A large number of these ventures had to close shop because of a lack of funds.
So how do you avoid being a part of this statistic? Turn to lending firms for financial assistance. Today, business owners are no longer limited to banks as there are alternative lending firms that provide immediate funding and flexible repayment terms. Capify makes small business funding simple. Apply today for $5K to $300K and get funds in days.
Now that you have a good idea of how to circumvent the most challenging of business problems, apply these strategies and watch your business grow.