In the first few years of business, SMEs face a lot of different challenges. Some are harder than others to overcome and about 20% of small businesses fail by the end of their first year. By the end of their fifth year, 50% go under; and by the tenth year, that number rises to 80%.
So what is that causes this high level of failure?
Interestingly, and perhaps not surprisingly, there’s a number of common issues:
- Finding Customers
This first one isn’t just an SME problem; even the biggest, most successful companies have people working hard every single day to find new customers.
But, for SMEs, the challenge is even more significant. How can you find customers when you’re not a household name?
In addition, acquisition costs are incredibly high, and SMEs may not have the same spending power as larger businesses.
How to Fix It:
Finding customers starts with figuring out who your ideal customer is. Spraying and praying doesn’t work for anybody — you need to make sure you’re spreading the word to the right people.
Craft an idea of what your target customers look like, what they do, and where they spend time online. Creating very specific templates can dramatically improve your business results and help you create content that caters specifically to your target demographic.
- Increasing Brand Awareness
If your customers don’t know who you are, how will they buy from you? Brand awareness helps generate trust with your audience, helps them associate your brand with your products and services, and those factors combined help drive sales and build a base of loyal customers.
How to Fix It:
There are many ways to spread brand awareness, but the three I’ll mention are:
PR: Public relations is less about paying for a spot in a news blog and more about focusing your voice and finding your place in the market.
Co-marketing: Partnering with partner businesses will help you inherit some of their image and reputation and create brand evangelists outside your circle. It’s a fantastic way to gain a large volume of new contacts alongside your organic marketing efforts.
Blogging: Running a consistent, high-quality blog will also help you build brand awareness. Not only does a blog help drive traffic to your website and convert that traffic into leads, but it also enables you to build some authority and trust among your prospects. It’ll also help you build an email list, which brings us to our next point…
- Building an Email List
To move prospects along their buyer’s journey to eventually become your customer, you need to build trust through consistent nurturing, staying top of mind, and continuously providing value. Email marketing is still viewed by many as the most effective form of marketing. However, what many people call “building an email list” is buying an email list. This is never a good idea! Your email deliverability and IP reputation may be harmed, but it’s also a waste of money.
How to Fix It:
Instead of buying lists, build opt-in email lists. These customers are already interested, and interested customers are more likely to make purchases, especially with nurturing.
- Lead Generation
Most SMEs struggle with lead generation. A successful lead generation engine turns website visitors into prospective customers and provides a steady stream of sales prospects while you sleep.
How to Fix It:
To make the lead generation process work for you, start by looking through your website and ask yourself:
Do each of your webpages clearly guide visitors to take action, or do they leave them wondering what to do next?
Do you have lead generation CTAs on each of your blog posts? (Do you have a blog at all?)
- Delighting Customers
Positive service experiences entice customers to make additional purchases and repeat loyal customers spend more. It’s cheaper to retain an existing, satisfied customer than it is to acquire a new one.
How to Fix It:
It takes work to turn customers into raving fans, so understand why your customers chose you and what they need, set concrete expectations at the start of the engagement, deliver on those expectations, innovate how you can provide unexpected extras and continue to measure satisfaction and improve the customer experience
- Scaling
This is a tricky one, especially since every situation is different. You’ll see this problem arise in all areas of business: in product development, in marketing and content creation, in hiring, and so on.
For example, many business owners will push growth at all costs. But if you grow your company too quickly, you’ll find yourself having to hire quickly, which directly feeds into the small business challenge of finding and hiring top-quality talent.
In addition, you may land a large client that makes you feel hopeful for the future, but it then becomes difficult to keep up with their needs. Because of this, a small business challenge is being able to scale and managing the side effects that come with scaling.
How to Fix It:
Unfortunately, there’s no perfect answer here. What it comes down to is not obsessing over every detail but the right details. Closely monitoring product perfection, for example, might not be as important as doing so over customer service. It’s better to put your fears aside and launch a product that isn’t perfect because you can always update and improve it. After all, once your products are in the hands of your customers, you can learn much more quickly what’s working and what isn’t.
While these are just a few of the many business challenges facing small businesses every day, there are many others out there. Many of them can be planned for and mitigated with the proper planning and strategy.
One of the ways to overcome the many challenges faced by SMEs is to work with a coach… someone who can ask challenging questions and provide guidance based on their own and their other clients’ past experiences.
If you’d like to explore coaching as an option, then get in touch.
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