Many small businesses face challenges within their first few years of being open. Some businesses are even forced to shut their doors and often do so for similar reasons. In this article, we’ll explore the top five challenges new small businesses face and how to overcome them.
1. Finding Time to Write a Business Plan
Business owners spend most of their time working in their business, rather than on their business. Although it’s important to ensure your customers are happy, it’s equally important to develop a business plan.
Business plans outline your business goals and how you’ll attain them. Without one, you can’t get funding, may get sidetracked more easily, and may spend money on things that aren’t helping you grow. So, spend more time planning for success.
2. Developing an Elevator Pitch
To stay competitive, you should develop an elevator pitch and be prepared to use it.
An elevator pitch is a brief summary of your business and its value proposition. A value proposition is the business promise or the benefits a customer can expect by engaging with your company. Develop your elevator pitch and practice. When someone asks what you do, you’ll know you’re delivering a consistent message.
3. Attracting and Retaining Customers
Small businesses may find it more challenging to attract and retain customers. This is because they generally don’t have marketing budgets that can compete with those of larger companies.
You must be strategic and creative in how you attract new customers. Online marketing, search engine optimization (SEO), email marketing, and social media are great ways to attract and retain customers on a budget.
While using these tactics, it’s important to spend time differentiating your business from your competitors. This way, your message will speak directly to your target audience. If you don’t know much about your target market, explore our Market Research Resources & Tips.
4. Understanding Your Financials
Starting your business with a solid financial foundation is essential to long-term success. However, a study conducted by Intuit Canada reported that one in four Canadian small business owners lacked confidence in their financial knowledge.
Ensure you review and understand your financials every month so you’re aware of cash flow. Add up your expenses monthly, so you know the minimum gross sales needed to cover them. Also, reviewing your sales over the past year can help you figure out where your sales are coming from and project sales moving forward.
If you struggle to understand finances, hire a bookkeeper or accountant to work with on monthly reporting.
5. Keeping an Eye on Cashflow
Cashflow challenges could mean real danger for your business. So, you should dedicate time to managing it.
Know what your cash balance is at all times and project cash flow six months out. Having projections will prevent you from overspending and keep your finances in check. Remember, every challenge is an opportunity for growth, so embrace the journey.
Small Business BC is Here to Help
SBBC is a non-profit resource centre for BC-based small businesses. Whatever your idea of success is, we’re here to provide holistic support and resources at every step of the journey. Check out our range of business webinars, on-demand E-Learning Education, our Talk to an Expert Advisories, or browse our business articles.
