The five most common challenges SMEs are faced with..
1. Cash Flow
Money problems are usually at the top of most lists of business woes. For small businesses, the major worries are making sure enough money is coming into the business to meet outgoings. Things like clients delaying payments, unexpected outgoings, and outstanding bills can quickly cause big problems. There are several money management tools to help you to manage cashflow. Apps that can create budgets, calculate VAT, automate bill payments and even provide a free credit score. Tools like Float and Pulse can be a huge help in preventing cash flow issues.
It’s very easy to fall into the trap of trying to do everything yourself if you’re a small business owner. However, long hours at the office can result in fatigue, one of the most overlooked challenges when running a small business. Starting your day tired and you will most likely be disorganised, forgetful, not pay as much attention to clients as you should and run the risk of making mistakes.
It is key that you pace yourself and learn to delegate, (something that for any highly motivated individual is no easy task). Start by identifying business elements that do not require your expertise, such as mail outs and administrative tasks. Think about taking on an assistant, even part-time, and also consider delegating tasks that are outside your skillset to specialists such as accountants, legal experts and communications consultants.
3. Finding and Keeping Good Customers
Clients on retainers are a real asset to new businesses. A good tip is to research your existing customer base and identify the characteristics of your best customers (those with the highest volume of sales, and the most repeat custom). Identify what you hope to replicate in new customers for business development, but also include additional services for current clients as it is much more profitable to grow current clients rather than find new ones. Always ask for feedback from your retained clients, another ‘must do’ when you’re looking at keeping valued relationships.
4. Motivating Employees
Today there is a real need to understand what employees want, (other than their pay cheque!), particularly for small businesses. Ensuring employees are happy and productive means genuinely open communication channels and being consistently approachable. Promoting a relaxed atmosphere where staff are able to talk to management is key and small perks like complimentary tea, coffee and snacks within the office incur little cost but can really help keep you in favour. Getting employee feedback is also very important. Too many businesses do not listen to their employees and then wonder why they have a high staff turnover. Introduce staff meetings and arrange for regular one to ones with individuals to gain important insights and feedback so your team feel listened to and valued. Most importantly, implement ideas put forward by your team and create an environment where these are owned by the entire team.
5. Staying Current
Running your own business can leave you so busy you forget to keep up with what’s current in your industry. When planning your working week, it is important not to forget to allocate time to research competitor activity and read a few relevant articles or blogs. This can be shared amongst employees and discussed in weekly meetings.
Attending conferences and exhibitions can really benefit small businesses by way of networking and getting your business name out there. If an event is particularly relevant you could consider finding out whether you could become a speaker at it.
Finally, it is imperative to remember that having taken the leap to start your own business you have the skills, drive and tenacity to assist you in overcoming almost any problem you can encounter. Good luck!
Rekha Welsh is the North East Loan Officer for DSL Business Finance Ltd. DSL is a not for profit lender pledging funds to ambitious small to medium sized businesses throughout Scotland. DSL delivers the Scottish Microfinance Fund on behalf of the Scottish Government. This loan Fund is available to both new and established businesses, with the prime objective of supporting enterprise in Scotland. Since launching in December 2016, The Scottish Microfinance Fund (SMF) has lent close on £2.2m to 140 business creating 140 jobs and maintaining a further 131. 48% of these loans are to women owned enterprises, thereby supporting women entrepreneurs across the country.
DSL is authorised and regulated by the Financial Conduct Authority. Reference Number 708646