7 Small Business Growth Challenges and How to Tackle Them
Our clients constantly face these common small business growth challenges. From inadequate capital and cash flow management to finding the right personnel for openings. While it’s true that not all of these small business growth challenges are easy to overcome, there are steps you can take to ensure your business continues on its path toward improvement and stability.
Here are some common challenges small businesses face and advice on how to tackle them:
1. Cash Flow Management
One of the biggest challenges small business growth challenges is effectively managing cash flow. This involves keeping track of incoming and outgoing funds and ensuring that you have enough money on hand to cover expenses. To tackle this challenge, small business owners should create a detailed budget and stick to it, regularly review their financial statements, and look for ways to increase revenue. Additionally, offering incentives for early payments, improving inventory management, and negotiating better payment terms with suppliers can help improve cash flow. You may also consider seeking outside funding, such as a business loan or line of credit, to help with cash flow management.
If you are having trouble managing your cash flow and accounts receivable, then check out our free guide! Find it here.
2. Marketing and Branding
The reason that marketing is one of the top small business growth challenges is because of limited budgets and resources. But as they say, you have to spend money to make money. To overcome this challenge, you should focus on creating a strong brand image, leveraging social media to reach your target audience, and partnering with other businesses to reach their networks. But guerilla marketing will only get you so far. You can also attend networking events and conferences to make connections with potential customers and partners. From there, a small digital ads campaign paired with a strong inbound marketing strategy can kickstart exponential growth.
At AMB, many of our clients used to struggle with marketing. We know it’s common, so we created a tool that will help you review your marketing strategy. Check it out here.
3. Hiring and Retaining Talent
Finding, hiring, and retaining talented employees can be one of the largest and most important small business growth challenges, especially when competing with larger companies for top talent. To tackle this challenge, small business owners who can’t compete with larger firms on salary should offer generous benefits, a more flexible schedule, and clearly defined opportunities for growth and development. That, paired with creating a positive work environment should help make up the difference in salary. You can also utilize employee referral programs and social media to find and attract qualified candidates.
But you can’t do it all on your own, your talent will make or break your ability to grow your business. If you’re serious about finding the right people, then check out our Ultimate Guide to Building and Retaining the Right Team here.
4. Compliance and Regulations
Like all businesses, you must comply with a variety of regulations, such as labor laws, tax requirements, and environmental regulations. Keeping up with these regulations can be one of the most foreign small business growth challenges to many owners. Especially for businesses with limited resources. To tackle this challenge, you should probably outsource these aspects of your business. Get advice from legal and accounting professionals, stay informed about changes to regulations, and implement systems and processes to ensure compliance.
Even those few entrepreneurs and business owners who have an MBA aren’t experts in every aspect of their business. Utilize our business systems audit, where we’re provided you a checklist to identify areas of opportunity for your business. Find that tool here.
5. Keeping up with Technology
Staying ahead of the curve when it comes to technology can be a challenge for small businesses, as you often don’t have the money to invest in the latest hardware and software, nor the IT personnel to implement it. To overcome this challenge, small business owners should focus on utilizing cloud-based solutions that are more affordable and accessible, such as cloud-based accounting and customer relationship management (CRM) software. You should also be open to new technologies that can improve your operations, such as automation tools, and seek advice from tech-savvy employees or consultants.
Taking a systematic approach to your business tools, processes, and standard operating procedures is a good way to build a stronger foundation for the rest of your business to build out from. Our interactive ebook, 9 Steps to a Systemized Business, explores high-level principles like vision and mission statements, as well as important details like KPI measurement and CRMs. Here is the page to download that ebook.
6. Competitor Analysis
Small businesses often face intense competition, both from larger companies and other small businesses in their industry. To overcome this challenge, small business owners should focus on providing high-quality products and services, building strong relationships with their customers, and continuously innovating to stay ahead of the competition. You can also conduct market research to understand their target audience and competitors and use this information to differentiate yourself and create a competitive advantage.
7. Managing Growth
As small businesses grow, you may find it difficult to keep up with the increased demands on their time and resources. To tackle this challenge, small business owners should delegate responsibilities, invest in systems and processes to streamline operations, and seek outside help, such as hiring an experienced manager or consulting with a business coach. You can also consider expanding your team or outsourcing tasks to help manage growth.
At various points, your business will be worth more to outside investors, or even potential buyers. If you are interested in getting a professional business valuation, then use our tool here.
Are you looking to fly your business to hire horizons? At AMB Performance Group, we believe each business is unique, and some challenges may be specific to certain industries and scenarios. With our business health check, business diagnostic, and marketing review, we can help you identify and overcome these common challenges. Book your complimentary business coaching session today!