The four biggest challenges in business
Four common challenges could threaten any business.
It's that time of year again - the silly season. The time when everything cranks up because every man and their respective dogs need to have all their projects "done before Christmas". Where your team is tired, hanging for the holidays and your customers freely tell you they're not going to purchase right now because they're waiting until your products go on sale in the new year.
'Tis the season when you close your doors on Christmas Eve, brave the crowds for some last minute gift shopping, and head home to eat too much ham and turkey. Then you collapse for a short break and attempt to catch up on some much-needed sleep. You swear that you're not going to work so hard next year and decide to use the break to get on top of your ever-growing "to do" list. And you commit to never letting your cash flow get to a state where you're forced to cut your salary to the point where you are the lowest paid person in the business.
Sound familiar? Every year, I have the same conversations with small business owners. And I expect that these themes are still going to be prevalent this year. While many businesses have thrived in 2012, I've also been speaking to many business owners who have found the year nothing short of challenging.
What have been the biggest challenges I've seen this year and how can you overcome them?
1. Increased competition
It's never been easier to start a business. Gone are the days when you had to queue for hours at a government department such as the NSW Department of Fair Trading to buy a business name. Now you can buy a domain name online for $10 and, voila, you're in business. Of course, staying in business is a whole other matter.
While business cards were once a costly exercise involving expensive graphic designers and printers, now you can produce professional looking business cards at a fraction of what they used to cost. Just use any number of templates supplied by affordable digital printers.
Think up some bright business ideas with friends over a few beers on the weekend and, by Monday, you can already boast the infrastructure you need to start trading. You can even open an online store (using platforms like Shopify or Bigcommerce) in an instant.
Even though new competitors don't have the pedigree or experience that you have, you still need to convince your prospects that you're the one they should deal with. It's a battle of perception and marketing. And the business owner who masters these elements will win the sale.
2. Finding the right staff
Without exception, every business owner I speak to says that their biggest challenge is staff – finding the right staff, retaining them, and ensuring they buy into the vision of the business. I'll freely admit that I have no magic answers here. In fact, if someone could develop a formula for recruiting and engaging the right team members, they would make millions.
A small business is almost like a family. And, like many families, they can work well, they can be dysfunctional or they can go off the rails just because of one person's issues. Sometimes, you can feel like you are part-boss, part-colleague, part-parent. My accountant often says to me: "In big corporates, one of the biggest challenges is politics in the workplace. When it comes to small business, it's personalities."
When you work in a small environment, each team member's personality can have a huge impact on the harmony and productivity of the business. The key is to learn how to deal with different personalities, figure out what drives each individual team member and tailor your management accordingly.
3. The technology gap
I'm seeing an ever-widening gap between those who embrace technology and those who don't. I was recently at a conference where a woman stood up and said: "I don't like social media. I don't want to use it. I don't want to use my computer. What does that mean for my business?"
The conference panelist was very diplomatic and said: "In today's world, I think you'll find that if your competitor has an online presence, they will be more easily findable than you will be. You'll have to work harder to reach your target audience. And you may also find that other people who want to do business with you – such as suppliers or potential joint venture partners – may prefer to work with someone who understands the importance of being online."
The woman who asked the question simply got up and left the room. Clearly, she didn't like what she was hearing.
While the woman's reaction may have been extreme, this is not an isolated incident. The "technology gap" is widening. If you're a small business owner, I think it's pretty scary if you're not keeping up with online trends because you're simply going to be left behind.
4. Valuing your products/services
Related to the issue of "getting online", it's also important to continue to value your products and services. These days, so much information is freely available on the internet. Business owners generously provide resources and ideas on their blogs – this has become the norm.
"Content marketing" means that many business owners are sharing professional advice in articles, blog posts, podcasts and so on. The purpose is to educate prospective customers - and develop a "know, like, and trust" factor so that you are top of mind when the prospect is ready to buy.
I don't have a problem with this. In fact, I think it's a great strategy. But with so much available for "free" on the internet, you need to draw a line in the sand – one that's clear to yourself and your prospects – about when the "free" information/advice stops and where payment kicks in.
Yesterday, a person called my business to make enquiries about one of our services. A service that costs money. After explaining what was involved – and also outlining the fees – he then proceeded to complain that we should provide the service to him for free. He was quite indignant (or rather, irate) when we wouldn't.
Similarly, I once spoke to a woman who wanted me to be her business coach. She said: "I know you do a lot of charity work so obviously you're not motivated by money. So I imagine you won't charge me for our sessions."
Words fail me in the situations described above. But they do occur. Ensure that you value what you offer (particularly your services which are not as tangible as products) and draw that line in the sand.
As 2012 comes to a close, I want to thank all the readers of Enterprise. You've been a lively bunch! Thanks to those of you who've contacted me offline as well – I appreciate your feedback.
Being a small business owner myself, I'm passionate about the world of entrepreneurship. I love hearing the stories of other small business owners and I love the fact that you are all working towards your own entrepreneurial dreams. There will always be challenges and obstacles but getting over them makes success all the more sweeter. Here's to big wins to all of you in the new year.