In the Western world, as many as 60% of small businesses fail or become bankrupt in their first year.
That is an intimidating figure, and it can be off-putting if you are looking to start your own small business. However, it is important to look at the reasons behind that stat: why do small businesses fail so often, and what are some of the best ways to prevent yours from also failing?
There are some common issues that all small companies face, but luckily, they can be overcome. This article aims to address some of the most common issues that small business owners face and to provide tips on how to manage them.
Cash Flow Management
A common problem is that small businesses may struggle to maintain a steady cash flow. This can be due to irregular work, or late payments from clients or customers.
So, there are some solutions for this. You can send invoices promptly and offer clients discounts if they pay early. You can also monitor expenses and aim to speak to any suppliers about produce. Or, look for new suppliers at websites like godirectwholesale.co.uk. Try to save some cash for any unexpected costs and keep an eye on things like insurance. Are you paying for coverage you don’t need with your insurance? Have a look and see if you can reduce the payments.
Attracting and Retaining Customers
Small businesses often struggle to compete with larger companies and maintaining customer loyalty can be a strain for smaller businesses. You can aim to use social media and e-mail marketing to stay connected with your customers and try to focus on personalized and high-quality customer service. It’s even worth looking into discounts for repeat customers, as this will keep them returning to your business and will keep your income steady.
Hiring Talent
It is often hard to find dedicated or skilled employees who are willing to do a good job for your business. A simple option is to offer competitive wages and benefits where you can. If possible, aim to provide remote or flexible working arrangements, as this has recently gained popularity and can help with work-life balance. You can also invest in training and growth options and try to create a positive and inclusive workplace environment, as word of this spreads, you will soon have a pool of talent representing your company. Great!
Adapting to Technology
It might also be the case that your small business may struggle to adopt beneficial, new technologies, due to either budget constraints or lack of knowledge. So, you should seek to identify the most critical areas where technology can add value to your business, which is usually in the realm of automation, with inventory and invoicing being prime options. Try to stay up to date on technological trends that can help you grow your business and avoid fads, as while it can be cool to try the new big thing. You may find that it is just not right for your business. Look around, take your pick of free trials, and go from there, rather than signing up for something that may cost you more long-term.