By: Emma Miller
On your path towards success, your business will encounter numerous bumps, however, some of these problems tend to hold your business more than others. Most of the time, the entrepreneurs behind these SMBs are first-timers, which means that they lack the necessary experience to recognize the gravity of the situation in the given moment.
On the other hand, learning on your own experience, especially in this situation, is a risk you can’t afford to take, especially if it’s not your risk alone. Therefore, here are five things that are the most common reasons why SMBs don’t develop at their expected pace.
Lack of short-term goals
The first roadblock that most people encounter when running a small business is the inability to set short-term goals as milestones. Sure, in the long-term, you might have your goals in exact numbers of website traffic, customers, conversions and profit. However, by the time you reach the point at which you were supposed to achieve it, you might notice that there’s a large discrepancy between your plans and long-term results. This is why you need to learn how to set daily, weekly and monthly goals, in order to ensure that you’re always on the right track, as well as that there are no unwanted digressions.
Weak online presence
The next thing that can potentially ruin an SMB is the lack of online presence. Sure, about 50 percent of small businesses don’t even have a website, yet, in 2018 the first thing that most customers do when they hear about your business is looking you up online. This is why you need A) a strong social media presence, and B) a quality website.
On the other hand, impressing people who already know of you is not your only goal. What you need is to enable people who are merely interested in your industry to stumble upon your website and not one made by your competitors. This can be achieved through several inbound marketing techniques, especially by investing in SEO and link building tools that can help your ranking.
Your break-even point depends on your profit, which, directly depends on your overhead. The bigger it is, the longer it will take for your business to become fully profitable. Therefore, renegotiating with your supplier might be a great idea, as well as finding a way to make your infrastructure more frugal to run. Switching to low-power production, going for a more affordable broadband and replacing all the bulbs around the office with a LED alternative. Furthermore, adopting money-saving trends and automating your work processes so that you can do more work with smaller manpower is always a good idea.
Maintaining cash flow
Burning cash is perhaps the most sacred duty of every small business. For your small team to stay on top they need to be motivated, trained and equipped and all of these things require money. Sure, you might have enough account receivables coming in, however, you might just not have the luxury of waiting for this money to arrive. Therefore, you need to either find a way to sell some of your invoices to a factoring company or apply for a small loan. Either way, you need money that you can immediately channel into something that will create future growth. Everything else just slows you down.
An inefficiently diverse client base
Regardless of how loyal your client base is, the key thing to remember is the fact that they don’t need the infinite amount of your products. In other words, regardless of how financially potent or loyal they are, relying on a single client (or several of them), is not a smart idea. Even if they do keep buying from you, once they figure out just how dependent you are on them, they gain the power to dictate conditions, even outright blackmail you. Therefore, the key to the survival of your business may very well depend on your ability to diversify your client base as soon as possible.
On the other hand, by diversifying the demographics of your clients, you get the privilege of pivoting your company, if one of your services turns out to be much more profitable than others.
The well-being of your company doesn’t only depend on your ability to recognize a potential problem but also in your capacity to do so in time. By leaving any problem for too long, you risk allowing it to get out of proportions. Nonetheless, by keeping track of the above-listed five, you are a lot less likely to allow this to happen.
By Emma Miller
About the author
Emma Miller is a digital marketer and blogger from Sydney. After getting a marketing degree she started working with Australian startups on business and marketing development. Emma writes for many relevant, industry related online publications and does a job of an Executive Editor at Bizzmark blog and a guest lecturer at Melbourne University. Interested in marketing, startups and latest business trends.