Challenges That Small Business Faces and How to Overcome Them

The current political situation in Europe and the high inflation rate in the USA are bringing one new challenge to small business owners after another on both sides of the Atlantic. However, small business has been a pillar of western economies. Half of the revenues earned in the US in particular is earned by small business ventures. Being a small business owner has always been a tough job but it has become even more challenging in recent years due to the COVID pandemic, the military conflict in Europe, and the recessed economy in the USA.

At the same time, small business is fun. Small business is rewarding. Small business brings satisfaction when you achieve your goals. Small business makes you independent from external sources of income. Small business can bring all your talents to light. Small business can unlock your creativity. Small business makes you free in choosing the methods that you apply to achieve your goals (provided that these methods are legal, of course). Small business can earn you enough for a living. Small business enjoys support from the national Governments of all developed countries. A small business pays less in taxes than a corporation does. A small business can be owned in several different ways. Small business owners are free to hire the personnel that they like. There are dozens of other advantages that you can find if you engage in small business. No wonder, going into small business is an opportunity that a great number of people find highly attractive.

On the other hand, there is more than one challenge associated with small business. Nevertheless, small business owners have always been among the most inventive ones and when they face a challenge, they are often able to come up with a fresh solution. What are the main challenges that small business owners face today? What can they do to overcome these challenges? Based on some sociological research we point out the main problems that small business ventures run into and suggest some ways to overcome them.

Marketing challenge

To grow your small business into a larger business you need more customers. The marketing challenge has always been there but it can become especially acute when the overall economic situation worsens. What can you do about attracting new customers in the digitalized world of today? As you have certainly guessed, you can use the digital media to tackle the marketing challenge that your small business faces. All people – young, middle-aged, and old – spend a lot of time in the virtual world these days. This is exactly where you can find them, try to attract their attention, and turn them into customers of your small business company.

Every large company has a website and no small business should ignore the opportunity to have one either. However, not all websites are informative and easily navigable. Your small business should have a nice, user-friendly, and attractive website that can bring new customers to your small business. Make sure that the website user can purchase your items in one or two clicks. Contact forms and live chats will also help promote your small business greatly. Don’t forget to make your website search-engine-friendly!

If you have a referral program advertised on your website, it can also do good to your small business. If the customer is happy with the goods you sell or the services that you provide, he or she will not have anything against recommending your small business to their friends and relatives. If you sell high-quality goods or services, the referral program will work as a snowball bringing your small business new clients one after another. Don’t be shy to offer a discount on the next buy to the customer who brings you a new one!

When your small business has a nice website, you can launch a search advertising campaign. It’s going to require some investments but the ROI will be good because the more Internet users can find links to your website the higher are the chances that they will become your small business customers.

Another instrument that you can invest in to promote your small business is display ads. Your potential customers have to see your ads often because according to sociological research, people need to see the ad seven to ten times before they decide to contact you.

You can also invest time (but no money) in one more promotion instrument that may bring good profits to your small business. If buyers share their email addresses with you, you can engage in email marketing. Send them newsletters at regular intervals to inform them about any new products or services that your small business offers. In fact, you don’t really have to have any news to send newsletters: you can use this promotion instrument simply to remind the customers about your small business venture.

It is also very important to be active in virtual social networks such as Facebook or Instagram, for example. More than half of the western world population use social media when they want to find a product or service. Again, promoting your small business in social media takes time and money but if your small business pages have many followers, some of them are likely to turn into your customers.

You should realize that there are a number of tools that can help you make your small business venture more visible in social media. There are tools for creating images in social networks, for example. Similarly to the accounting software (see below), these tools can be free and there is nothing wrong about using free tools to promote your small business venture in the virtual world.

As you can see, there are a number of digital marketing channels that you can use to advertise your small business. The challenge here is to understand what channels work best for your small business and what channels are just a waste of time and money. Advertisement industry experts usually recommend that you should adhere to the cross-channel marketing strategy but it may be too expensive for a small business. If you can afford it, however, hiring an advertising specialist (on a contract basis, of course) could help you tackle the challenge.

On the other hand, there are some things that you can do yourself to improve your small business performance in terms of your marketing strategies. You can develop a clear understanding of what group(s) of customers you are targeting when promoting your small business in the virtual world. You know very well that you cannot please everybody and you can’t sell your goods or services to every single person. Some people are not going to need them while others are probably unable to afford them. And you have only a small business, after all.

People can be grouped by a vast number of criteria but what characteristics are most important for a small business owner trying to attract more customers? These are the potential customers’ income bracket and age. Depending on your small business area of specialization, many other factors can be relevant too such as the potential customers’ location, gender, education, preferred lifestyle, and so on. In any case, you should concentrate on the media channels that the potential customers of your small business venture most often use. Do they prefer visuals? Or do they like to text? Targeted marketing is something that small business owners often pursue.

When you have decided what groups of customers your ads should target, you can choose the most (prospectively) efficient marketing channels to promote the goods and services that your small business venture sells. You are probably not going to use all of the advertisement opportunities that you can find in the virtual world but it would be a good idea to use several of them if you want your small business to make profits. When you use several advertisement media, you have to use certain marketing metrics that will let you understand if you are promoting your small business in the right way. Some metrics are more indicative than others and you might want to seek advice from a marketing expert who can help you promote your small business.

Fiscal challenge

According to a survey, half of the small business owners in the USA find the task of filing tax reports difficult. It’s a real challenge to follow all the changes in the fiscal legislation, keep track of all your small business expenses, and compile the reports in a proper form. Thus, taxes are a significant challenge that small business owners face but not because they are too high. Filing the tax reports is a bit too complicated for a small business.

What can you do to combat the challenge if you are a small business owner? First, keep the books. Record all the expenses that your small business has, put all the bills, invoices, and other financial documents in separate files, and just stay on top of all the operations that your small business conducts. One of the most frequent mistakes that small business owners make when filing tax reports is the failure to separate their small business expenses from their personal expenses. You may face a fine if you fail to do so.

You may also want to consider hiring a professional accountant to tackle the tax reporting challenge. Few small business owners have accountants on their permanent staff but many apply for accounting services when they need them. You’ll have to pay the accountant but his or her professional help will let you avoid fines so you may actually earn some money for your small business by paying the accountant.

Another thing you can do is use the accounting software that a great number of small business owners use to compile their tax reports. (Nine in every ten small business owners do that.) Some accounting software comes free of charge so you won’t even have to pay anyone to do your taxes.

Inventory and supply chain challenge

Due to the current political turbulence, many small business owners find that their supply chains are broken and they are running out of stock on the items that they sell. Finding new suppliers would solve this problem but it is a challenge in itself. One more thing that a small business owner can do is stock up whenever the chance to do so comes his/ her way. You may have to take out a loan but if you have items to sell, your small business will survive and you will be able to pay back.

Besides, you can do a careful inventory of the items that you have in your warehouse. Maybe there are some goods that you forgot about but you can put them on the empty shelves now to replace your usual items. You should also realize that your customers understand the current supply challenge that your small business faces. Many small business owners face this challenge now. Talk to your customers, explain the situation to them, warn them that you are running on stock on certain items, and tell them when you expect the items to be back in stock. People will be kind to you if you treat them kindly.

Recruitment challenge

Hiring the right people is one more serious challenge that small business owners often face. Around three quarters of small business companies in the USA, for example, have at least one unfilled position. The reason for this situation is simple: large companies can offer higher salaries to qualified personnel than small business owners can.

There is a way around this challenge, however. People work for other people not only for money but also for the joy that their jobs bring to them. If you have to hire somebody to help you with your small business venture, try to create a friendly atmosphere for your employees. Be caring and attentive to them and they will make your small business thrive even without getting paid very much.

Because it is difficult for small business owners to compete with large companies for qualified personnel, your vacancy notice has to be truly outstanding if you choose to put it up. Perhaps it would be easier to find a new employee for your small business venture by asking your existing employees to refer their friends and acquaintances to you. If the person is happy to work for you, he or she is likely to recommend your small business venture to a friend. Don’t be shy to offer a bonus to the worker who brings a new employee to you!

Overwork challenge

Many small business owners admit that they ‘do nothing but work’. A large portion of them dedicate fifty or even sixty hours a week to their business ventures. Achieving business objectives brings satisfaction without doubt but that’s not the only thing that life is about. After all, you have started a small business to be able to cover your everyday costs while being your own boss. You need to have some free time to spend the money that your small business earns!

There are a couple of things that you can do to overcome the overwork challenge that many small business owners face. Try to become better organized. Maybe attend a course in time management. Also, learn how to delegate responsibilities. If there are certain aspects of your small business that you do not particularly enjoy, or that are too burdensome, see if you can find somebody to deal with these aspects instead of you. If you work too hard, you will eventually burn out. Nearly half of the respondents (small business owners) in a sociological survey said that avoiding burnouts was a big challenge that they faced.

Yes, running a small business is a demanding task and you may face one challenge after another if you are a small business owner and all of them may be of different nature. However, if you remain positive and open-minded, you can overcome every challenge without any doubt! Being engaged in a small business can bring a lot of joy and satisfaction when everything is fine-tuned.