Overcoming Challenges All Small Business Owners Face
Being a small business owner demands tenacity. Whether a franchise owner, or operating an independent business, the success of your small business is contingent on how hard you work. With only 50% of all new businesses surviving five years or more, and one-third surviving 10-years or more, many small business owners ask themselves, “how do I stay in the success rate, not the failure rate?” The reality of these numbers is reported by the Small Business Administration.
There is no magic formula in small business. Successful small business owners have learned how to prepare for a variety of challenging situations. Being adept to the climate of your business and foreseeing predicaments before they happen can mean the difference between plunging and profits. There are a few key small business issues that recur in business forums as major problem areas.
The goal of this article is to point out the major issues facing small business owners and offer some guidance on how to avoid them.
1. Securing Cash Flow
The most typical cause for early businesses to fail is having problems securing cash flow. Many small businesses have huge worries with clients stalling payments, unexpected costs, and outstanding bills emerging that can’t wait to be paid. Without a constant stream of revenue, it’s difficult to keep a business going.
Many small business owners have discovered the power of money management tools. There are a variety of costly software apps that can help manage cash flow, create budgets, prepare taxes, automate bill payments, provide credit scores, and improve the bottom line. Taking advantage of using resources like accounting and bookkeeping software is beneficial, especially when you’re juggling 100 other tasks.
To prompt reluctant clients to pay an invoice, money management software can automatically send friendly email reminders. Another way of securing cash flow is establishing a recurring revenue stream. Recurring revenue ensures cash flow, despite any external issues your business may have. For example, Splash and Dash Groomerie & Boutique exclusively offers a membership program to customers. This means they are the only pet franchise with a recurring revenue stemming from customer membership.
2. Local and Regional Economic Health
Almost ten years after the burn of the U.S. Recession, some small business owners are still feeling the effects. Having a business that is contingent on the local economy is like having a seasonal business. Have you planned for the times when business will be slow? No one wants to be a Christmas novelty store in July. Unless you own a Christmas novelty store that also sells fireworks for the Fourth.
Even for recession-proof industries like the pet industry, the health of the local and regional economy can be an obstacle. This is why Splash and Dash Groomerie & Boutique puts an enormous amount of effort into securing profitable locations. Not only are variables like visibility, foot traffic, and proximity to other local small businesses important, but key demographics of the area should be considered.
On top of researching your location, small business owners can join the local chamber of commerce. Local businesses can collaborate to get grants to improve the community surrounding their shops. Joining SCORE, an extension of the Small Business Administration is also helpful. SCORE (Service Corps of Retired Executives) is a completely free networking program. SCORE can match small business owners with knowledgeable executives. One last way to combat a feeble local economy is to expand. If you diversify the terms of your location you can control the effects on your business.
3. Building a Profitable Customer Base
A common business idiom says, “You need customers with a problem that only you can solve.” The expression is true. Accessing customers through a niche or market gap is one of the strongest provisions against failure. You need to identify a unique selling point and convey this to your prospective customers.
Half the battle is identifying the selling point, while the other half is marketing. The key to identifying your customers is by creating rich customer data profiles. Of your existing customers, which ones are the best? Which ones have the highest volume and repetition of sales? Isolate the key metrics of these customers for an analysis that will develop your key target audience. Next, differentiate your marketing to appeal to this customer profile.
Another helpful way to establish return customers is with constructive feedback. Feedback can be a part of your follow-up engagement. Splash and Dash Groomerie & Boutique has an automated feedback system which supplies franchise owners with suggestions while also supplying online review sites with honest customer reviews.
4. Managing Overhead
Excessive overhead is a driving force behind great companies hitting a wall. If the costs to operate keep a business in the red over time then the business is inevitably going to close. During the first few years, it can be difficult to determine if you will be profitable. This makes the time after a grand opening an imperative place to establish low overhead.
Mitigating overhead involves paying close attention to the needs and demands of your customers. Your products and services must be a tailored version crafted specifically for your key customers. This helps you trim away excess. Inventory management software comes into play to support this process. Inventory management can help small business owners stay organized and keep the right products on the shelves without over ordering.
Also, being cognizant of employee scheduling, equipment costs, and other operational expenses can keep your overhead down.
5. Keeping Technology and Marketing Up to Date
Small business owners are under immense pressure during the first few years of opening. Many are so busy they can’t stay on top of the current updates in their sector. When you’re preventing fires and driving profits, it’s hard to attend industry conferences and expos.
Even reading business magazines relevant to your industry can keep owners current. Set aside time in your week’s scheduling to track competitors, read through business blogs, and engage with your marketing efforts. Reading through business blogs provides information on any shifts in your industry. Using marketing software with analytics can give you insight into competitors. Finally, staying on top of social media and content marketing can be easier with customer relationship management software.
Splash and Dash franchise owners have access to proprietary software that handles every aspect of back-office operations to make owning a business easier.
The Bottom Line
Keeping up with all this can be tedious. This is why many opt to invest in a franchise that offers support with the big picture items so that small business owners can focus on what’s in front of them. Splash and Dash Groomerie & Boutique is a pet franchise that helps its franchise owners succeed with a proven business model that helps many pursue their passion!
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