Starting a small business is an exciting, refreshing opportunity and for some it may have even been an idea which was in the making for many years. However, while there are many things that small business owners look forward to, there are also many challenges and pressures that they need to be prepared to deal with.
Especially in today’s competitive marketplace where many businesses have adopted the ‘why you should choose us above anyone else’ approach when targeting customers. This means that most businesses try to highlight the benefits a customer receives when choosing their services, and sometimes even try to exploit gaps in their direct competitors’ services.
1 – Competitive marketplace
Even some of the biggest, well-known brands like Apple, McDonald’s and Microsoft are constantly working hard, using their experts and their resources to find the next big thing that will keep them on top of their markets. In such a competitive time, it may be hard for small businesses to attract customers as it can be challenging to persuade customers to choose your brand over other household names.
This may be due to various factors, for example the customer has deep passion and loyalty for other more well-known brands and businesses, or they may view bigger and more established businesses as more reliable and more capable of delivering the services which they want.
· How can small businesses succeed competitive market?
When you are a less known business that is trying to establish a competitive position within your market, you must identify the right customers that would most likely shop with your business/require your services. You need to segment the market and have a clear idea of exactly who your customer is (their wants and needs, age, gender, household income, accessibility to your business, values, personality and more).
Once you have established the grounds of exactly who your customer is, you can then create strategies which will best attract these specific customers towards your business. For example, if your business is tailored more towards a ‘Gen Z’ audience (those born between, 1997-2012) then social media marketing campaigns and online marketing may get you more of a response than if your customers were considered ‘Baby Boomers’ (those born between, 1946-1964).
Of course, the services which your business offers will determine exactly how niche your targeting and tactics need to be. For example, if your business was a self-care service then you may be able to attract customers from multiple age ranges (Gen Z, Millennials and Baby Boomers), but you would then also need to consider your pricing strategy, location of business and many more factors. Understanding your customers and their circumstances will put your business in a greater position to target customers best suited for you.
2 – Balancing between growth and quality
When you are trying to grow your business in the early stages, balancing between investing on your growth and quality can sometimes leave you with mixed thoughts. On one hand, focusing on growth may mean investing in your market research, marketing campaigns or even extra features for your services (e.g. a café business considering serving lunch in the afternoon). On the other hand you may focus on the quality of your services, investing in better equipment or training for staff which would benefit your business in a different way as it would likely lead to greater customer satisfaction than ever before.
· Should small businesses focus on growth or quality?
This decision to focus on growth or quality largely depends on the situation and factors currently surrounding your business. It also depends on the goals you have set and where you want to see your business in the coming years.
Some businesses may be in a position where they are able to think about growth. When considering growth, you need to look at your resources and quality of assets and think about whether what you have now will support your decision to try and expand. Growth may mean scaling up your production, contacting new suppliers or asking more from your current ones, investing in a new department and more. If your situation isn’t capable of continuing on from what it is already doing, then growth may be more challenging and may not be the right decision.
If you have no plans in trying to expand your services and believe there is still room for your performance to improve within your market, then focusing on quality may be a better option. Investing in your current situation, improving equipment, space and other elements of your products or services will impress existing customers and help retain them for the long-run. You may even still experience growth in your overall sales as satisfied customers may be more likely to put in a good word about your business to friends and family.
3 – Keeping track of the latest trends
It is hard for smaller businesses to adopt the latest trends in their markets as they may not have the budget or resources to constantly implement every bit of change that they could compared to bigger businesses. However, it is still important to try and keep up with the latest trends within your respective market because customers may look at your business and think it to be less capable or stuck in the past, if you are not adopting new trends for example physical elements such contactless payment card machines and hand sanitiser stations, or even digital: websites and social media platforms. Innovation is something that customers want to see, especially in 2022 where there are so many tools and technologies which could be utilised to give the best customer experience possible.
· How small businesses can keep up with the latest trends?
For smaller business owners, it may be too optimistic to promise yourself, your employees and your customers that you will keep up with allof the latest trends. Depending on the capabilities of your workforce, you need to be on the lookout for what the next biggest trend is going to be and evaluate whether you need to adopt it and whether it fits with your goals.
You should also consider how much of a disadvantage it would be if you weren’t to adopt a new trend. Depending on how detrimental you think it will be by not having it as part of your business, you will have to decide whether it is worth the investment. For example, something as serious as the covid-19 safety measures such as hand sanitiser stations, extra wipes and a clear one way system was something which most businesses had to adopt, because there were certain government guidelines which all businesses had to follow.
However, there may be other trends which arise which your business either may not require now or may not ever need in the future. Understanding your business and the urgency of needing to follow a trend is something which small business owners must consider.
4 – Cybersecurity and data protection
For many small and medium businesses being targeted by hackers and scammers can be a real headache and difficult to recover from if the hackers are successful in breaching your business. As a new business, you will likely need to store information such as contact details, confidential documents, credit related files and more. If you do not have a secure server where you can store such information it may have a negative impact on your business.
If customers need to provide your business with their details to use your services or buy your products, they want to be reassured that their personal details will be safe. If you are not able to promise this safety to protect their data, it will discourage customers from engaging with your business.
· How to protect your small business from cyberattacks?
It can be a large investment when trying to ensure that your business is well protected from cyberattacks, however, it can be justified by looking at the increasing number of cyberattacks in the UK in 2021. Encrypting your data is one way you can protect yourself and your business. If a hacker is for some reason able to get hold of your data then encryption converts data into an unreadable code, which is only readable again when a specific key is provided to access the data.
Another way to protect yourself is to constantly invest in the latest systems and having the most recent updates because running any older versions of software may be easily exploited by hackers. It is a good idea to update your systems as often as possible, even setting up an auto-update feature on your systems to ensure you are as protected as you can be.
Finally, access control is providing only specific people access to certain bits of information. For example, confidential information between you and your client should only be accessible to yourself and the client. Potentially a third party if it is agreed upon in the initial stages. However, there should be no copies stored somewhere that anyone else can access. Access needs to be limited only to those who require it, to prevent data being spread to unauthorised people.
5 – Increasing brand awareness
Being a smaller business can mean that most of your customers are locally based. If you are an online based business you will have limited awareness if you are still new, as most likely you will have only shared with a number of friends and family and still require an increase in your overall brand awareness.
Brand awareness is important because there is no point in creating the best marketing strategy and campaign, or adding a new feature to your business, if no one is going to see it. A big challenge for smaller businesses right now is expanding their reach, especially since larger businesses are constantly expanding theirs too.
· How small businesses increase brand awareness?
Increasing brand awareness can take time, however, following a few simple steps now could make a big impact on a small businesses overall awareness in the long-run. One thing to consider is how powerful word-of-mouth is, with customers being 70% more likely to trust a business when referred to it by a friend or family. Asking customers to tell their friends and family either through an online post, or even by just providing the best service possible, will lead them to tell others and help massively in increasing positive brand awareness.
Another tip would be reminding existing customers of your services, or providing weekly/monthly updates through newsletters, email or even social posts. As well as increasing brand awareness, maintaining any sources that you already have is just as important. Building long-term loyalty with customers will lead to an emotional attachment where the customer may even start making posts referencing your business, sharing their thoughts on your business, starting social media brand communities and even defending the name of your brand when necessary. Customer loyalty can sometimes in itself become its own form of marketing, meaning your brand awareness will organically increase.
Finally, as we approach 2022 it is important that small businesses have consistency among all their channels of communication. Having a consistent tone in-store, through telephone, email, social media, newsletters, posters and more, is essential because you want your business to be recognised for having a particular character. If it is not seen as consistent then it is more likely to be unsuccessful in its overall growth.
For small businesses, there are many challenges that they will need to be able to combat. However, while some of these challenges may seem tricky to deal with, all small business owners will be able to find their businesses in a greater position once they have put the right measures in place. These challenges shouldn’t discourage people from starting up a new business, as becoming a successful business is ultimately a long-term, rewarding process.