The top challenges facing small businesses
For energetic entrepreneurs, founding and operating a small business can represent an attractive opportunity. However, there are significant pitfalls to running a small business.
Research, by financial services provider Ormsby Street, suggests that six in ten small businesses fail within five years of trading – a pretty staggering statistic. With this in mind, here are some of the top challenges facing small businesses, and what you can do to overcome them.
Overcoming skills gaps
It’s no secret that the skills gap presents a significant barrier to progress for small businesses. Companies with fewer staff require the team that they do have to be highly competent in their given field.
The problem arises when there aren’t enough highly skilled people in the talent pool to choose from. Unfortunately, this is reality for many industries, meaning that the skills gap is a real challenge for small businesses.
One solution is to upskill existing team members. Although your staff might not yet be proficient in a given role, there’s nothing stopping them from expanding their skillset. Introducing a well-designed training plan can really help to overcome skills gaps. Consider funding a training course or higher education programme. Alternatively, introduce your own bespoke learning programme internally through use of purpose-made training videos or online portals.
Finding the right talent
Speaking of skills gaps… the fewer the number of people available with the skills you need, the harder they are to recruit. The talent pool is increasingly competitive, and hiring the right talent is one of the biggest challenges facing small businesses.
The good news is that beyond a large pay packet, one of the most important factors to new recruits is company culture. In fact, over a third of the UK workforce will leave a position over poor company culture, according to a report by breatheHR. You’re onto a winner if you can convey a positive company culture comprised of happy team members.
Make new recruits aware of the benefits of working for your small business – whether that’s a perks scheme, a development programme or an effective internal communications strategy.
Engaging with employees
Engaging your teams is critical to retaining your best staff and keeping them motivated, focused and productive. Engagement programmes are a key part of a good internal communications strategy.
Consider what you are doing to engage your teams – do you recognise hard work with perks such as free lunches, health and wellness programmes or engagement events specific to your employees’ interests? What about flexible and agile working packages? These are all great ways of keeping your team motivated and increasing their engagement overtime.
You might offer a fantastic service, but this is of little consequence if no one knows you exist. Small businesses face the challenge of reaching the right audience, especially when they are just starting out.
However, bringing in a well-thought out communications strategy could be the solution. Video, for example, generates great returns when used on social media – a whopping 79% of consumers prefer watching video to reading about a product, according to Wyzowl.
By using entertaining and informative videos cut to the right length and edited in a style right for your audience, you stand to garner attention online and bring about awareness of your brand.
Small businesses generally aim to expand – especially those who are overly reliant on the same clients. However, when you have a lack of resources, expanding whilst maintaining quality can be very difficult.
Outsourcing is recommended – particularly for those who only have expertise in one given area. This allows you to focus on maintaining quality in the area you know best by continuing to expand.
Although there are significant challenges facing small business, don’t give up hope – there are many things that small business leaders can do to secure success. What techniques will you try?