Running a small business does not mean you face small problems. On the contrary, problems can oftentimes disrupt a business and cause it to fail. In this video, I will discuss the three biggest problems that small business owners face, and how you can solve them.
- Finding and keeping the right customers
I believe any business, large or small, will concern themselves with finding and targeting the right customers. However, given the limited resources of small businesses, finding, targeting, and keeping the right customers are usually one of the primary concerns of businesses I have come across.
One of the challenges would be to ascertain whether potential customers would like to purchase the product and if so, also try to find out how to keep them loyal to the business.
One of the things small businesses can do is to focus on understanding customer pain points and finding solutions to those problems. Remember that people will buy a product because it offers a solution to their problems.
For example, why do people have a preference when purchasing one phone over another? Is it because of its functions? It’s features? It’s technology? Or perhaps the simplicity of the phone itself? Could that be its selling point?
Apple has recognised this in its own products and coined the phrase, “It just works.” While this statement can be open to debate, it reflects the fact that Apple understands how products can be made to be simple enough for its customers to enjoy the products while using it.
So when we look at targeting potential customers, ask these questions: What is the problem your potential customers are trying to solve? How effective are their current solutions? What are their pain points? How does your product resolve these pain points better than the competition? Then explain to them how your product or your service precisely address these pain points.
Businesses require a cost-effective means of promoting their product or service with a very limited marketing and advertising budget in mind.
When you have a very limited marketing budget, remember these three words: Word of Mouth. When promotional budgets are low, the most effective promotion tool is word of mouth. Studies have shown again and again that people are likely to patronise a product or service when someone they know and trust recommends it to them.
So how do you leverage on word of mouth? First, offer an impeccable product—a product that provides solutions to a significant paint point. Second, offer personalised, hands-on customer service, because nothing delights a customer more than impeccable service. If you can resolve the first two points, then you are on your way to having a product that not only solves a problem but also retains repeat customers. And loyal customers may become your own brand ambassadors because they are more likely to talk about you to their peers.
- Retaining and motivating the right employees
Another challenge amongst small businesses is keeping and motivating the right people. One of the basic solutions is for small businesses to choose your employees carefully. Some of the age-old hiring principles include choosing attitude over aptitude, offering a fair compensation package, and being clear about career progression within the organisation from the very beginning.
It is also important for small businesses to develop a strong company culture where employees find a purpose in the organisation and feel valued for what they do and what they contribute. Successful startups, like Zappos and Airbnb, keep their employees motivated because of their company culture.
In the video “4 traits you need to succeed in business,” I discuss the importance of company culture and how this impacts business success.
- Managing cash flow effectively
Small business finance is also a primary concern. You may be paying too much on your overhead, or are having difficulty forecasting your cash and revenue flow. And with very limited resources, a simple mistake can lead to dire consequences.
One of the things you can do is to keep an eye on your expenses. Review your spending regularly, because small leaks in expenses can balloon and affect your bottom line. Expenses such as rent or insurance policies are always worth a look—shopping around to see if there are cheaper alternatives will help your financial situation.
One of the other things I’ve seen that small business owners do is to try to do everything yourself as a small business owner. Recognise that you don’t have all of the skills to efficiently and effectively run a successful business—find help whenever you can. Remember that your time is also valuable, and making efficient use of it makes a lot of business sense.
In my video, “Maximising the best asset in your business,” I talk about how you can maximise the most important asset in your business-you.
To summarise what I’ve mentioned in this video, if you want to begin solving problems facing many businesses, you need to:
- Identify how your product solves a problem
- Find and hire the right people
- Be cost-effective in how you operate your business
If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.