Growing a business can be tough especially for small and medium enterprises (SMEs), and though these challenges could be overwhelming for newbies, they can be remedied through proper measures. The challenge is not just limited to the aspects of business, but also in staying afloat amidst the stiff competition.
Thus, it is important for SMEs to determine the ten challenges that confront them. Through this, they would be able to address whatever problems they encounter.
1. Catering to a target market. One of the primary challenges for SMEs is to address a target niche. This can be tricky especially when they are still starting out. The disadvantage for SMEs is that they have the tendency to generalize their market because they need more clients. This cater-to-all strategy might be effective at first but could be counterproductive in the long run.
2. Looking for office space. A growing business should be looking for office space where they could stay and conduct their transactions. However, even office spaces should be well-thought-of. It should be accessible to their clients and, as much as possible, away from competition.
3. Advertisements and promotional activities. This shouldn’t be too much of a problem now because of social media networks and the Internet. Instead of spending too much on print ads and marketing strategies, SMEs could instead channel their investments on small-scale advertising techniques.
4. Looking for professional networking. Though competition is tough among SMEs, it will also do them good to be part of a community which is composed of people who share the same interests and ideals. These networks and affiliations would provide beginning entrepreneurs the foundations of business.
5. Resources. These resources could be financial, marketing, and human. Another big challenge for growing SMEs is the manpower. Sometimes the manpower is limited so the budget could be redirected to other important things. This is the reason why there are small companies that have only 2 to 3 employees, the boss included.
6. Always producing a unique product or service. This is crucial to a business, mainly because competition can only be beaten by two things: mediocrity or ingenuity. Bigger companies could crush SMEs unless the latter has the capacity to think of better products or services that would attract clients.
7. Getting your money back. Sometimes the return of investment (ROI) could take a long time, especially if you are just starting out. The solution is to speed up your campaign, or to patiently wait for your money to be returned from your sales.
8. Sustainability. In this tough competition, the question is how to survive. Research is the key. Be on the lookout for what’s trending and what clients need.
9. Financing. SMEs usually resort to loans because their finances are not enough. A lot of people have various strategies, such as having another business to finance one, or borrowing from loan companies.
10. Being in demand even after five years. As a company, how can you be in demand in the market even after the other companies have closed down? The answer lies in your ability to constantly reinvent your product or your services. If one strategy does not work, don’t hesitate to switch to another tactic.