“Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma - which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition” – Steve Jobs.
Entrepreneurship isn’t only about creating a company – it’s also about turning your dream into reality. While this sounds splendid and ideal, starting a company is extremely difficult and complex. You have to understand digital marketing, supply chain management, programming, and the like. If you don’t, they can become hurdles you must overcome. Here are 5 challenges small businesses frequently face:
1. Human resources. Many small business owners often have a dearth of knowledge in talent recruitment. They often lack knowledge in filtering out unsuitable candidates, identifying specific attributes that make someone a fitting team member, determining a candidate’s maximum potential. This inadequacy can cause long-term financial damage. The reason is that hiring an unsuitable candidate implies that you’re assigned an unfitting individual to manage your client accounts or perform your marketing initiatives. This in turn can induce overwhelming business performance which could cause your clients to leave, marketing initiatives to fail, and internal conflicts arise.
2. Management. “Hire people who are better than you are, then leave them to get on with it . . . Look for people who will aim for the remarkable, who will not settle for the routine” – David Ogilvy. Managing your employees properly is key to your business’ success. To effectively manage your team, you have to ensure your employees are getting the proper care they need, the correct training and guidance that help them excel, and the appropriate compensation that reflects their hard work. However, this is easier said than done. A lot of small business owners lack experience in managing people. They’re unsure on what their employees need, what motivates an employee to work diligently day in and day out, and what buttons to push to maximize an employee’s potential. By lacking expertise in management, a business owner can lose his top talent to his competitors as well as respect from his team members. Moreover, it can lead to low team morale where employees neglect the business owner’s requests and tasks assigned.
3. Sales. “The purpose of a business is to create a customer” - Peter Drucker. A business can’t exist without its customers. With that in mind, impeccable sales skills are crucial to a company’s success. However, many small business owners lack expertise in this area. Many businesses owners often have a brilliant product or service but lack the sales capability to take it to market by emphasizing the product benefits and unique selling propositions. These business owners as a result frequently encounter long buying cycles and low conversion rates.
4. Customer retention. According to Ipsos, it costs businesses five times more to attract a new customer than to retain one. Therefore, in order to sustain its company, a business owner must continuously retain its clients while exploring new ones. By maintaining its client-base, a company can garner steady monthly revenue so that it’ll have the financial resources to grow its business. While this is a simple concept, many business owners become so focused on tapping into new markets that he forgets to serve his existing ones. This as a result could cause the business owner to lose his current customers and face a financial blow.
5. Long-term vision. In addition to losing its existing clients, a company may also lose sight of its long-term vision due to vigorously finding new prospects. A business owner may forget his long-
term goal such as becoming the largest marketing agency in Vancouver and focus primarily on achieving short-term goals like getting a new contract. This in turn prevents business owners from making sound long-run decisions. For example, a business owner may not establish leadership in a large emerging market in the next five years, explore a consumer market that will have a 20% income growth in the next decade, and shift away from his current target market as it’s shrinking by 5% year-over-year. These misjudgements will further stunt a small company’s financial development.
"The best way to predict the future is to create it" – Peter Drucker. By starting a company, you’re controlling your future. You’re determining who you want to work with, how your company should run, and who you want to recruit. However, while starting a company has numerous gains, it also comes with many challenges. The challenges include difficulties in recruiting and managing top employees, finding and retaining clients, as well as planning long-term strategy. Nevertheless, creating a business is about turning your goal into reality and you should never let a few obstacles deny you from your goal.
So remember, “stay hungry, stay foolish.”