5 Common Small Business Owner Challenges, and How to Solve Them

I don’t need to remind you that new challenges for small business owners arise weekly, daily, or even multiple times a day. Don’t let this discourage you! Chances are, you didn’t embark on this journey because you thought it would be easy. Use this problem-solving list to focus on what you do know, and shed light on the things you don’t.

Many small businesses use internal metrics to track how they’re doing. But comparing one set of internal metrics to another doesn’t always paint a clear picture of how an operation is doing. In fact, even a simple comparison of your business with another business can be misleading depending upon the business you use for contrast.

Measurement is one of the first challenges that a small business owner needs to address. While measuring how you’re doing is important, to get a good gauge of whether your business is doing well or not, measure it against your industry as a whole. You may find that your business outperforms many of your competitors, or that sweeping economic issues have affected all the businesses in your industry equally. Perhaps you’ll discover that you are lagging behind, despite increased month-over-month sales.

Seeing where you fit within your industry can give you a clearer picture of how your business is performing–information that you won’t have by using internal data alone.

Sam Walton, the legendary mass retail tycoon, was once told that his big-box retail operation would never make it in small towns where the population size couldn’t support the sales volume he needed to turn a profit. The logic was if you don’t have a large population base to sell to, you’ll never make it as a volume-based retailer.

What is gross profit potential for small towns from an objective standpoint? Another challenge for small business owners is putting standard business practices to the test.

So instead of listening to commonly accepted logic that fills the halls of so many corporate headquarters, Walton went into rural America and spent time with his potential customers, listening to the needs of the people he wanted to market to. He discovered that though there were fewer people, rural shoppers and small business owners liked buying large quantities of items at a time, otherwise known as “buying in bulk.” Walton brought his big business to small towns, which in turn, propelled his business to become the biggest brick-and-mortar retailer in the world.

Sometimes advice that you think is a best practice when looked at from inside an industry is hiding an incredible opportunity when looked at from the outside.

Sometimes challenges arise when small businesses try to compete with big businesses for employees. Unfortunately, most smaller companies don’t have the resources to offer the same exhaustive employee benefits packages and amazing perks offered by bigger companies.

But, small businesses still have a lot to offer. For example, at a smaller company, employees and interns have the chance to make an impact upon arrival. Think about it: the marginal benefit of hiring your first employee is massive in comparison to a large company hiring their 500th employee. Much bigger operations can create the “corporate cog” effect. So, make sure you outline these benefits while searching for candidates if you want to expand your hiring pool.

If you want to attract quality employees, connect to the sources that will feed your talent pool. If potential employees have a relationship with you before they go job hunting, they’re more likely to take your offer. Also, l et potential hires know the flexibility that working for your small business can offer. 

If you started your business without a safety net, owner’s equity , or cash reserves, you haven’t started a business–you’ve started an elaborate gamble that will most likely leave you broke.

I hate to be the bearer of bad news, but most small businesses fail, often because of a lack of knowledge, planning, and customers. If you haven’t put together a fallback plan, it tells me a lot about your ability to organize your business. Heck, some startups are missing a small business plan in the first place.

Starting a business will always be risky, but it doesn’t have to be a going-for-broke operation. If you haven’t already started your business , be aware of the risks and challenges involved, and then hedge what you can. For example, reserve some cash in case you need to stop the operation. Find a line of potential buyers for any used assets well before you go out of business. Think about how you’ll inform your employees if you can’t make payroll.

No one wants to entertain thoughts of their business failing, but for most startups, it’s a very real possibility. Having a plan could lower your stress level, make focusing on the needs of your business easier, and prevent other small business owner challenges that you might have otherwise faced.

Goods and services don’t sell themselves. If you thought up a great business idea, congratulations. But a good idea only becomes a profitable one when you understand who your market is and how to reach them.

If you’re not a marketing wizard, don’t worry. You can quickly learn how to do a market analysis , and gain insight into your customer base and competitive landscape. Thanks to the explosion of modern technology, there are more ways to find marketing channels than you can shake a stick at.

You can use tools to send targeted emails, like MailChimp. You can leverage the power of social media to make networks of faithful followers. You can start a blog and write content about your products or expertise. You can use search engine optimization to get your web pages to rank higher, and generate more leads. Or, you can physically go to the places where customers might be.

But a lack of channels through which to sell isn’t what stops most entrepreneurs from making sales. It’s lack of initiative that presents the biggest small business owner challenge when it comes to driving sales. You may be unsure of how to start, but start you must.  You have to put your product in front of people who want to buy, and they are out there.

Take a look at industries that sell products and services similar to your own. Where and how are they selling? Think about complementary goods and services to your own; would it make sense to be near them, or form a partnership with the companies offering them? Are there lots of people offering the same products or services in your area? Do you need to relocate to a place that has less competition, or open a second business location ? All these questions will help you understand where your customers are, and why they will or won’t buy from you.

The post 5 Common Small Business Owner Challenges, and How to Solve Them appeared first on AllBusiness.com. Click for more information about Mike Kappel.