Initiating a business is a great achievement for most startup enthusiasts, yet maintaining the same is the larger challenge. There are several standard business challenges that every business faces, irrespective of their size and nature. These include matters like raising sufficient funds, recruiting the right people, building a brand, selling the products and so on. However, some of them are unique to small and medium-sized businesses (SMEs) with greater impact on them. These are often those which big organizations have already grown out of long ago. In this article, you will explore the top three SME challenges and smart strategies to overcome them:
1. Finding and Retaining Profitable Clients
The startup businesses that thrive instantly upon their initial launching are usually those businesses that cater a unique selling point with the ability to communicate that with their customers. Consequently, SMEs also need customers struggling with a unique problem for which only you can cater with the solution. Therefore, you have to determine that unique selling point and convey it effectively to your prospective clients.
You can begin this by performing customer based research and identifying the typical characteristics of your current loyal clients – those who repeatedly approach you and have the highest volume of sales with you. You should also integrate this research into the analysis of costs and expenses required for particular clients, giving you a clear idea of their net value to your business.
Once you have done this, you are ready to focus better on your skills and put your energies on attracting new customers from the most profitable segment, proactively distinguishing unique offers that appeal directly to this customer type.
Feedback from your current best clients can also help you know their needs and better understand what they want exactly which also acts as the part of customer follow-up engagement. In fact, it is another ‘must do’ to keep up with your valued clients. Find out what types of forums and social media platforms they frequently use, bring your presence there as well, and start taking notes to stay updated with customer needs.
2. Inspiring and Motivating Employees
Staying motivated is not only vital for owners, founders, or top management facility of SMEs, but it is also necessary for every member of the enterprise. Whether your employees are striving to reach a business goal, making efforts to initiate a new venture, or simply managing the daily business operations, keeping their levels of motivation high is of paramount importance. This is because keeping demotivated and dissatisfied employees may affect your business in a number of ways, including:
- Reduced Productivity: Lack of job excitement and interest results in the delayed submission of assignments and incomplete work. Thereby, SMEs with demotivated employees suffer from poor workplace performance and customer service.
- High turnover: when employees do not feel engaged or challenged in the job activity at hand, they are likely to resign and seek employment elsewhere resulting in costly business turnovers.
- Negative corporate culture: Demotivated employees impart their negative attitude and behavior to their juniors and new hires. Such circumstances damage the entire corporate culture of an organization.
- Decreased revenue: Poor productivity, high turnover, and negative corporate culture will eventually result in increased costs and decreased revenues.
Consequently, lack of motivation melts your confidence and harms your potential for success. The more motivated you and your team members are, the more you are likely to succeed and thrive. There are many ways to inspire and motivate your employees, enabling them to perform beyond their ordinary abilities.
Some of them include:
- Expand self-motivation, passion, and interest to inspire your employees
- Ask for meaningful work
- Appreciate self-initiatives
- Promote your team’s accomplishments
- Minimize the complex rules and bureaucracy
- Hire high performers at competitive salaries instead of underperformers at cheap rates
- Pay them for what they are worth
- Arrange training and development programs for employees
- Socialize and get personal with your employees
- Treat people with respect, honesty, and love
3. Cash flow issues
Problems related to finances and money management in their many different forms are typically among the top lists of companies’ woes. And when it comes to SMEs, the major worries are usually customer stalling payments, outstanding bills, and unexpected outgoings that will not wait to be paid. Other issues also arise out of mismanagement of accounting records.
There are some tried, tested and globally approved money management tools which can help you perform bookkeeping activities effortlessly and manage the business cash flow better. These are multi-talented apps and online tools that can help you create business budgets, automate bill payments, calculate VAT, provide a free credit score and alert you to unusual outgoings.
Using online reminders and invoices are also an effective way to convince the reluctant customers to part with money. In fact, there are countless software out there that can provide you the option of free invoicing, accept payments on your behalf as well as charging the clients automatically.
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