If you own a small business, there are many problems and challenges you are likely to encounter as you strive to manage and grow. As a result, you must be prepared to solve some of the problems. The most common challenges include: cash-flow problems, fatigue, finding and retaining customers, motivating your employees, footing the business overheads and creating a marketing strategy. Read more about these challenges below, and how you can alleviate the burden on your business.
It is the most common problem affecting small businesses, and it is the most important aspect of every business. Businesses need liquidity to be able to take advantage of business opportunities. Financial problems are caused by factors including poor profitability, late payment or clients that are reluctant to pay their bills on time, as well as poor management of business financial resources.
For many companies, the wait on customer payment is one of the biggest factors in having cash-flow problems. Thankfully, with funding through invoice factoring, the wait on customer payment is non-existent. Invoice factoring pays you same-day on your invoices.
Finding the right funding solution is critical and can help a business meet its financial challenges. Loans and lines of credit can help businesses expand. Unfortunately, small businesses with low gross margins and a limited operating history might not have access to loans. Therefore, loans and lines of credit may not be the best option.
Luckily, modern businesses are not restricted and tied to a traditional lender. Factoring companies offer many B2B industries business funding through accounts-receivable financing. Instead of relying solely on your credit, the approval process is based on your customers’ credit. Factoring can help you buy new equipment, meet payroll and pay bills- and even start to set aside a rainy-day fund.
This is the second most prevalent challenge that owners of small businesses face. They work long hours as they try to get their businesses profitable. Entrepreneurs are under pressure to ensure that the business is running smoothly. As they strive to achieve this single-handedly, they get fatigued and may not find time to give clients the attention they need.
To solve this problem, small-scale business owners need to embrace a delegation strategy. They should identify business duties that do not require their expertise and assign those roles to the right employee. Specifically, they should delegate all tasks that require unique skills to specialists. Tasks such as accounting and resolving legal issues are better done by those with proper training.
As a business owner, you need customers with problems you can solve. It is useless to hang on to a client whose needs are beyond your capability. You need to identify customers you can serve satisfactorily. Research your client base and identify those with the highest volume of purchases and how often they repeat the purchase. Analyze their behavior and find out how much it costs you to serve them so that you can understand their net value. Once this has been done, you can focus on new customers.
If your staff is motivated, they feel like they are part of the business and will love to associate themselves with the company and its brand. Note that there are many things that employees want from business owners. They are not just interested in a paycheck, but they like it when you communicate clearly, are approachable and there is a relaxed atmosphere in their workspace. Small perks such as company lunches and staff parties help to create a good impression and will determine how they get attached to the business.
This drives many companies out of business. Paying attention to what the customers want, and provide services that are tailored to suit their needs. Eliminating services that they don’t need, but that would otherwise increase the business overhead, is a necessary move to keep your business profitable.
Small businesses must check out the current trends and ensure that they remain updated. Check out what your competitors are doing, carry out research and embrace social media to keep up with what is trending and new developments in the industry. Ensure that you attend seminars, conferences exhibitions and update yourself on trends.
Having a good marketing plan is important for any business. Have a clear idea about your targeted market and allocate a budget to promote and advertise your business. Choose a medium of advertisement that will help you penetrate the targeted market. To start, many small businesses begin with free or inexpensive social media marketing to begin making a name for themselves.
Whatever the challenges that you face, it is critical that you take actions that can mitigate them. Use a software to manage the business cash flows, delegate some of the duties to assistants and let the expert deal with tasks that require specialized knowledge. Work hard to make your most profitable customers happy and ensure that your employees are satisfied. To eliminate your concerns of cash-flow problems, contact TCI Business Capital. We are experts in providing cash-flow solutions to small businesses.
TCI Business Capital is an invoice factoring company serving businesses across the United States. For more information on factoring, call (800) 707-4845 for a free, no-obligation consultation and quote.