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Top Challenges for SMEs and how to overcome them

Business success is never achieved without having to overcome a few hurdles along the way. As the owner of a new, small or medium-sized enterprises (SMEs), you will find yourself solving issues – both small and large – on a daily basis. An arduous task by anyone’s standards.

Any new business brings with it an array of challenges; however, you should take comfort in the fact that these challenges will ease over time as you establish your company. For now, the key to dealing with challenges is identifying them in advance, rising to them and finding solutions.

An article written by author and marketer Gabriela Taylor outlines some of the biggest challenges new entrepreneurs face and offers advice on how they can be resolved. Let’s take a look at some of them:

“There aren’t enough hours in the day” is something you’ll find yourself saying – or at least thinking – a lot as your business gets off the ground. The key to effective time management is planning everything that can be planned in advance. Write down all your tasks, assign them timeframes and stick to them as best you can. Utilise diaries, calendars and planners and don’t put yourself under unnecessary pressure by overloading your schedule and/or attempting to do too much at once.

Time and money are arguably the two greatest challenges you’re going to face as a new business owner. It is inevitable that money will be tight in your first couple of years and you shouldn’t expect to make a huge profit. You need to account for that, ensuring there’s enough in the bank to support your business for those two years. Success, at first, is keeping your business going – profit comes later.

Lack of skills and/or knowledge
Owning a business requires skill and a lot of knowledge. Not just knowledge of the industry, target audience, competitors and current trends, but knowledge on business management, marketing and finance. If you don’t have sufficient knowledge in any of these areas, then you need to educate yourself – attend courses, read books, use websites and speak to business owners.

Going alone
As a new business with limited cash flow, you’ll be looking to make savings wherever possible. You may think it makes financial sense to manage the business independently; however, as the business starts to grow you need to employ more people to support it. By taking on too much, the quality of the services you provide are likely to drop, which ultimately means that you will lose custom. And the money you’ll lose through lost custom will far outweigh the cost of hiring another employee to help you.

A lack of planning
A business plan is the quintessential document all new business owners need. Your plan is like a road map; it needs a destination (where you see yourself in two years’ time or more) and establish a route that will take you to that destination. Sections you must cover in your plan include:

  • Executive summary
  • Company overview
  • Analysis of your industry, target audience and competitors
  • Financial plan
  • Operations plan
  • Marketing plan
  • Summary of your finance predictions

Your business plan will become an essential point of reference when you’re establishing your company; it will enable you to clarify your direction, identify future goals and monitor your progress in reaching those goals.

Building a client base
Unfortunately, customers are more reluctant to use the services of a new business, instead turning to larger companies with credibility and well-established reputations. Your challenge, therefore, is to give customers a reason to use your services over your competitors’.

Think of how you can stand out and engage your target market. You might not have years of experience, but focus on other ways you can appeal to consumers. For instance, being a small company with a limited customer base allows you to focus more on each individual customer relationship – something that larger firms with thousands of customers are incapable of doing. By building and fostering relationships with your customers you will help them to feel valued, which in turn can boost loyalty to your brand.

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