As a small business owner, you’ve likely fought hard to get where you are. Don’t worry, you’re in good company.
Small businesses make up the majority of businesses in the U.K. and the U.S. According to the Department for Business, Innovation & Skills in UK, small businesses account for 99.3% of all private sector businesses at the start of 2015. Meanwhile, small businesses with less than 20 employees account for 86.2% among small business owners set up as C-corporations, according to the US Census Bureau.
Despite their strength in numbers, they wield much less power than the big conglomerate companies, big box stores, national, and international chains.
Whether you’re a retailer, restaurant owner, inn keeper, or service provider, you’re likely fighting big business for customers. But the customers you already have are probably fiercely loyal to you. That’s something you can’t take for granted.
Still, you feel like you’re facing a never-ending list of challenges. Here, we discuss three of the biggest problems threatening your small business, and how to deal with them and come out on top.
When you’re your own bank, growing your business can be a challenge. If the real bank isn’t giving you enough, what’s a small business owner to do?
Rather than taking out a second and third mortgage, get other people to see and appreciate your business vision. Some options include:
If you’re a small independent retailer, you can’t beat the prices that the big box stores offer. They get bulk pricing, and can afford to sell things at a discount, whereas you’re not getting the same volume discount. Instead, offer quality items and unique goods that can’t be found elsewhere. You’d be surprised to see how many people would pay extra for those.
When you’re the owner, manager, accountant and janitor, it can be exhausting. Even if you have a small team, it’s still exhausting. You just can’t compete with companies that have more manpower than you. However, lots of people want to support small independent businesses – it’s a huge movement right now. Offer personalized, warm service, along with great customer relations and follow up that the big companies don’t. Huge companies see customers as numbers.
As a small business, you have the power to treat people for the individuals that they are. Build a relationship with them, treat them like family and they’ll respond in kind.
There’s Room for You
Big business, despite its power and reach, can never take over the whole market—whatever industry you’re in.
Because sometimes, the same people who patronize big box stores for some things, also frequent small retailers for their other needs. Someone who shops at Target or Walmart can still eat at small family-owned restaurants, right? The same goes for almost any kind of entrepreneurial venture.
Running your own business might be a dream come true for you. Being your own boss takes a lot of the stresses off – you’re probably more satisfied with your work than an employee struggling in a corporate environment.
But small business owners know it’s not as easy as it sounds. Although you don’t have to worry about being fired, the company’s finances are your finances, and vice-versa. Your number one priority now is making sure your business has enough in the bank to pay you, your employees, utilities, and vendors. You’re also responsible for getting the products on the shelves and getting them out the door, just so you can begin the whole cycle all over again.
A recent Canadian poll showed that finances was the second biggest cause of stress for small business owners, after hiring – and retaining – reliable employees. It’s not always easy to balance the books, especially if your business is new or seasonal. It takes time to get used to the process of invoicing and paying everyone. And if there is a feast or famine cycle of work or customers, you’re probably looking for strategies protect your business during leaner times.
The good news is that it gets easier with time.
In an ideal world, you’ll make the desired profit from your entire inventory. In reality, this rarely happens for small business owners.
It takes time to learn when you should place orders and estimate how much stock you need, depending on demand. Remember that, for most businesses, you are buying wholesale to make a profit. If necessary, it is always better to sell goods that have been sitting around for a while at a discount – but still at a break-even price for you – rather than have it sit around collecting dust.
Goods will depreciate, and the longer you wait, the more money you will lose. Stagnation is nobody’s friend, especially if you’re dealing with perishables.
You need a solid invoicing and follow-up system, so you can bill your customers on time. At first blush, you may think that you’re doing them a favor by not billing them right away – more money in their coffers for longer, right? Wrong.
As much as you’re trying to balance your books, other businesses are trying to keep on top of their payables, too. Send invoices promptly, along with your sincere gratitude, of course. (Tweet this)
Don’t forget to set up a time frame for follow-ups. Three weeks (or 15 business days) is about right for sending a reminder.
To make it easier for everyone, consider setting up a credit card billing function, so that your regular clients can make auto payments, instead of issuing a check or going online to make an e-transfer.
Consider Running a Promotion
Businesses have predictable busy months and slow months every year. For instance, flower vendors are busiest during valentines, while turkey farms are busy the months leading to Thanksgiving.
Think about the lean months for your business, what causes it and is there a way to get more customers in? For instance, rainy days are considered ‘low season’ for resorts, so they’re more inclined to give discounted rates and promotions. Can you do something similar?
Creative small business owners reach out to a group coupon service to sell vouchers, offer discounted rates for new customers, or bundle up several services or products into one heavily discounted offer. They get creative to keep their business afloat.
Running a promotion is a great way to get rid of old inventory, and ensure you have incoming cash—and customers—during the dry months.
Improve Your Inventory
Take a long, hard look at your inventory or at the services you offer. What moves out the door quickly? You likely have a product that keeps getting sold-out, sometimes even before you can place another order. But you may also have a product that stagnates, constantly getting marked down to rock-bottom prices before anyone notices.
What kind of services do your customers often get? What do they ignore?
Check your sales records to look for these trends then make changes accordingly. Stock more of that product that frequently gets sold out. Stop carrying those items your customers don’t want. Examine the services your customers don’t often choose—is it outdated, terrible, or just not packaged well enough? Small business owners know that inventory matters, so they keep meticulous records in hopes of gleaning from that data later on and improving their inventory.
Despite your best efforts, you don’t have a crystal ball, so you may find yourself in a financial crunch at some point. The key is to relax and learn to roll with the punches.
Try the strategies here now—whether times are good, or you’re struggling to keep afloat—just think of it as your buffer for when the going gets tough.
You live in a small town – maybe even a township or a hamlet – that doesn’t support a chain store, a franchise, or any kind of big venture. After all, there aren’t enough people to support a large endeavor, and there isn’t enough money to support a franchise. There’s also a shortage of real estate, and possibly land, unless you’re planning on getting your own land rezoned and building from the ground up, which can be expensive. What’s a small business owner to do?
Not to worry – this doesn’t mean that you have to relocate to a bigger city to realize your dream of owning your own business.
Rural businesses are on the rise, and while new business owners in rural towns aren’t taking on franchises, they are instead tapping into their entrepreneurial sides, exploring different options and new way of doing things. All it takes is a vision, some ingenuity, some creativity, and a little bit of elbow grease to get started.
First, take a look at your town. What’s missing? How many people live there? What do they need? Talk to them.
What do people leave town to buy, or what service do they say is missing? What would make the people’s lives easier?
Once you’ve figured that out, check out our list of great small business ideas with a good chance of succeeding in a small town:
1. Join or Set up a Multi-Purpose
If you can’t afford the rent for office or storefront space on your own, consider joining up with one, or several other retailers to share the rent – and the customers. This could work in your favor in another way as well – customers may be more likely to visit if they know there are several businesses at their destination rather than just one. If they can have a snack and do their groceries at the same time, it’s worth the trip, right?
A common example of this is a boutique store, where several artisans display and sell their handmade goods so that one store carries several brands.
2. Pop-up Shops are all the Rage
You may have heard of pop-up shops – temporary shops that open up in temporary locations – which can last from a few hours to several months.
This is a trendy store idea that got their start in the big city, when craftsmen, home cooks, and indie entrepreneurs wanted a temporary venue to sell. Locations can be anywhere from a school, park, mall grounds, or the local art gallery.
In most cases, all you have to do is get permission from the land or building owner, set up your shop, and bring your goods in along with a big sign. After that, it’s just a matter of selling your stocks. Play music, sing a jingle, or offer a free sample, sometimes you need to get creative to grab people’s attention.
Pop-up shops provide small business owners a simple way to test the demand for their idea.
Examples: Farmyard Darlings, a specialty collectible pop-up shop for vintage and country collectibles turned full-fledged retail store. Another example is the pop-up shop HND students set up at Birmingham City University.
3. Keep on Truckin’
Talk about food-to-go – the food truck industry has been hot for years, traditionally selling fast foods like burgers, hot dogs, fries, and coffee. But lately foodies are finding their favorites on board, like sushi, tacos, burrito, churros, and even pancakes.
Trucks are easy to care for, and easy to relocate if the owner finds that one location isn’t working out. Is the weather bad? It’s easy to close up shop, too. Food trucks can make a lot of money at summer festivals, town events, and outside office buildings.
Example: Who knew a food truck selling Crème Brulée would be such a hit in Australia? Well, it is and The Brulee Cart is rapidly building a huge fan base wherever they go.
4. It Takes a Village
Little business villages are a shopping destination, where a single store is less likely to get people to stop and browse but a collection of them is sure to attract even the most hurried traveler. Shopping villages are often quirky, small, and located in historic areas or old downtown areas.
Souvenir shops, family-owned wineries, organic farmers selling produce, and other specialty stores are perfect for tiny business villages.
5. Set up an Online Store
Who says your customer should be limited to the folks in your neighborhood? With an internet connection, you can easily set-up can online store to help you reach more customers. Choose from tons of delivery and fulfilment companies to ship your products, so you don’t have to worry about logistics. You can even set-up a subscription box that includes a wide variety of your products.
Online stores are perfect for brick-and-mortar businesses that don’t deal in fragile or perishable goods. If you sell food, seasonings, wine, or other ingredients, just choose a delivery method that ensures your products get to the buyer well before it spoils.
Example: Taylor Stitch, a clothing store specializing in well-fitting day to night clothes, has two retail stores in San Francisco. But they also accept online orders from in and out of the U.S.
Remember, a standalone store isn’t your only option. Go explore other options possible given your location and business, or try one of the ideas here.