There are many advantages to being a small business. For starters, smaller organizations can be more flexible than their larger counterparts. This helps them to move quickly due to a lack of red tape, which is an advantage in getting new products and services to market.
But there are just as many challenges to being a small business. After all, you’ve got to fight your way to the top. From a lack of capital to limited access to market research, it can be difficult to get your startup off the ground successfully. Just consider the statistics: according to a one study, 60% of startups only survive up to three years, while roughly 35% make it to 10 years.
While the overall odds are not always in favor of small businesses becoming corporate behemoths, with proper planning and execution success is possible. Below is a list of the three biggest challenges small businesses face and how to overcome them.
Access to Capital
One of the biggest challenges facing small businesses is limited access to capital. According to a survey of 500 business owners conducted by OnDeck, 64% of businesses that applied for capital couldn’t get financing of any sort while 82% of businesses were refused by their banks. The process for getting capital can be long and arduous. You can’t just put on a nice shirt and expect the bank to fork over money. Rather, entrepreneurs must convince the bank that they’re not a risk, which can be done by establishing and maintaining good business credit.
Not sure where to begin? To build a good businesses credit score, start by partnering with vendors that report their trade information. What’s more, pay your creditors on time as this will signal to banks that your business is dependable and low-risk. And lastly, continually check your business credit score to verify that the information in it is accurate and up-to-date. Believe it or not, inaccurate information, such as your business address, can damage your business credit score.
In today’s marketplace, in which competition is high and buyers are more sophisticated than ever, it can be difficult to generate easy money. Ever sale counts. This is especially true for small businesses that don’t have the bandwidth to hire a large sales and marketing team. Luckily, small businesses can leverage the Internet to grow sales.
To help generate small business sales, consider developing a comprehensive inbound marketing strategy. Inbound marketing—such as content marketing, search engine optimization (SEO), and leveraging social media—helps to attract leads that are already interested in your industry, product, or service. This is the opposite of outbound marketing – think cold calling campaigns, or traditional TV, radio, and print ads. With outbound, you’re reaching out to find your audience. With inbound, the audience was already searching the web for your business’s type of offering.
Access to Market Research
Market research is the foundation for which all organizations build their sales, marketing, and product strategies. Market research gives businesses valuable insight into their audience and industry to help identify opportunities within the marketplace. Without market research, small businesses owners might as well be driving around aimlessly without GPS, just hoping they’ll stumble across their destination. While important, startups don’t always have access to high-quality market research. Google can be a powerful tool for gathering data, but the information is often inaccurate and outdated.
To gain access to actionable market research, a small business might want to consider partnering with a third-party data provider like Hoover’s. With detailed information about 85 million companies within 900 industry segments, Hoover’s provides companies of all sizes with information that can help them penetrate new markets and create competitive sales and marketing strategies.
Let’s face it; running a small business is difficult. By acknowledging and preparing your business to overcome some common challenges, however, you can help to launch a successful venture.
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