While running a small business can be extremely rewarding, there can be little doubt that it can also be extremely challenging. Here are some of the challenges which owners face:
Attracting New Customers
A lot of small businesses simply won’t have the power to launch marketing campaigns in order to attract new customers. This means that they will have to rely on cost effective methods such as word of mouth whilst highlighting the importance of customer retention.
Apart from a detailed business plan, a marketing plan is also important for any business. Create a clear idea about who your target market is and who your competition is. This will allow you to allocate a budget for advertising and other promotional activities, as well as allowing you to decide through which medium to advertise.
Analysis of your target market will also allow you to price your products/services appropriately. It is vital that whatever you provide is affordable to your target market and that your advertising effectively reaches them.
Economies of Scale
It is a common problem for smaller businesses to be priced out of the market by larger companies. Large businesses have the means to mass produce in larger numbers, therefore allowing them to push down production costs. This saving can then be passed through into the final price which they charge for consumers.
Money
Finance is a huge challenge which small businesses are facing and what can restrict growth. Largely because lenders see small businesses are too high a risk in a precarious economic climate, many small businesses can still find it difficult to acquire a loan from banks.
Lack of Payment Facilities
Despite the fact that credit cards have been around now for half a century, many small businesses have long felt unable to accommodate such facilities due to the costs associated with renting card terminals and processing payments, in addition to the cost of a dedicated phone line.
However, this situation is slowly changing, due to the introduction of systems that do not follow this model, but Instead use modern smartphones that now have the processing power necessary to accept credit and debit card payments with little, or no, upfront cost, as well as no contractual obligation.
