Starting a small business from scratch can be strenuous and exacting. Running and managing business processes can be a real challenge for an entrepreneur. There are many novice business operators who find obstacles in managing their cash flows, and thus feel vanquished at the very beginning of their entrepreneurial journey.
Lack of management skills and challenging business environment are the key reasons why more than 60 per cent of small businesses in Australia fail within their first three years. According to the Australian Bureau of Statistics, there were around 261,450 businesses exited from the market sector in 2016-17. To an addition, it is also estimated that first-time business owners have a 50/50 chance of survival – which depends on how they run the business and understand the current market condition.
That is one of the key reasons why many budding entrepreneurs are looking forward to buying established businesses for sale in Australia to minimise the risk of failure and earn high profits with low overheads. However, it is an ideal way to enter into the competitive business world, but, still, you need to overcome existing challenges to meet your targeted organisational goals.
Here in this blog post, we’ve compiled the 5 major setbacks that every small business owner faces. These roadblocks not only stop you from growing your business in the existing market but also test your patience, management skills and your optimistic approach as a business operator.
So, let’s get started with our five major small business challenges:
1. Lack of Funding/ Cash flow Issues
Unfortunately, money management or cash flow is one of the most challenging issues in the small business world. Even the well-settled businesses can face the issue of cash flow. If you don’t have enough funds to run your business operations or to pay your staff or buy raw materials/products, then you couldn’t survive for a long in the existing business industry.
Unfortunately, commencing a new business with narrow funding are forcing businesses to shut in their starting phase. It is becoming hard for entrepreneurs to manage their expenditures, unpaid bills, and employee’s salaries, and that is the reason why they fall in their first three years.
However, the problem can be solved with the assistance of full-featured cash management software and tools. These will keep a close track of the incoming and outgoing of your funds in a well-organised way. Whether you need to estimate your budget, analyse your financial resources, invest your capital or record your receipts, the tool will help you manage your cash flow in the most effective way.
2. Lack of Marketing Skills
Marketing of a small business to the targeted audience has emerged as one of the common setbacks these days. Lack of proper marketing knowledge and stiff competition in the existing market are the two key factors that have restricted small businesses from achieving goals. Being a smart business owner, you should know your targeted customers, different marketing strategies, effective marketing platforms and customer’s taste and behaviour.
With the constant evolution of digital marketing, it has become even more difficult to convince potential buyers and generate leads and higher revenues. In order to sustain in the Australian Business Market, you have to market your business leveraging the best marketing strategies. Try to gain your knowledge and emphasise more on your realistic marketing objectives. You can do the following to roll down the marketing challenge:
- Create a list for your target market.
- Target your potential customers and reach out them.
- Cleverly choose your marketing platforms- be it an online marketing or offline one.
- Keep your statements precise
- Stay connected to your targeted audience
- Research your niche
- Promote your products and services in a proper way
- Get the most out of social media platforms
- Create an official website to represent your business on the web.
- Appreciate reviewers and always reply to negative comments.
Apart from this, you can involve in personal interactions to stay ahead from your close competitors available in the existing market.
3. Finding and Retaining Potential Customers
While well-established organisations are focused on customer-orientation, small businesses are still finding challenges in targeting their new customer base and retaining their old ones.
No matter how well you create your marketing strategies, it is impossible to generate leads if you don’t communicate your selling point clearly to your targeted customers.
There is no denying on the fact that digital marketing has educated your customers to a great extent. But there are still plenty of things you can do to represent your brand, products or services in the best possible way.
It is good to begin by researching your targeted customer base. Identify the traits of your existing customers – who have helped you in generating the highest sales volume. Also, integrate into cost assessment process associated with specific customers to know their net value.
Once you are done with this, focus on attracting new customers from your profitable segment. Use social media platforms, effective digital marketing tools and email marketing to reach them. Try to connect with them via personalised service channels such as chat sessions, email, etc.
Being a business owner, it is your key responsibility to find out the specific needs of your customers related to your products and services and explain how you can meet them. To understand their needs and behaviour, you can ask for feedbacks- this can help you improvise your marketing strategies for higher sales and revenue.
Tip: If you don’t have enough money for a startup, you can search for a renowned business for sale in Australia. Buying an existing business comes with multiple benefits such as the low risk of failure, existing customer base and proven marketing strategies.
4. Recruiting the Wrong People
Whether you have a small business or a big giant, everyone set limited capital for their employees. However, most of the small business owners make a mistake of hiring wrong people and then suffer from the losses.
Since an entrepreneur builds the structure of a business, he or she will need a team who can help in fulfilling the business goals with ease. This means recruiting the right people for the right designation is crucial for the success of a company.
According to the experts, it is important to hire only those who can perform their duties with perfection. Look for people who can play more than one role in different scenarios. This is critical for a small business because that is where one can minimise your expenses.
Tip: Develop a small but potential team who can bring creative ideas to the table and help you in taking your business to the new heights of success.
5. Having Excessive Overheads
Overheads also fall under small business challenges, and having too many overheads could grind everything to halt for good companies as well.
In order to solve the issue of excessive overheads, you need to focus on what your customers actually want and strive to provide them with the products and services tailored to their needs. This means understanding the customer requirements and providing the tailor-made solutions can control your overheads.
Try to provide the discount coupons or offers that benefit both you and your customers. This can add value without increasing your overheads.
Challenges are out there everywhere in the business world. You will face difficulties in establishing your brand image. But the winner is the one who can triumph over their fears, failures and challenges.
You can also buy a franchise model in Australia offered by a well-established business to achieve your business and personal goals.
Making the right choices at the right time can help you become a successful entrepreneur in this competitive market.