Thriving small businesses are the heart and soul of communities across the UK because they create jobs, financial support and help to strengthen local economies. To reach a level of success, many small business owners will tell you that there are certain struggles along the way which force businesses to adapt, cut back on staff or re-evaluate their business goals and strategies.
We take a look at the main difficulties small businesses encounter, with tips on how to prevent problems spiralling out of control.
Together with rent, business rates, purchasing stock, employing staff and various other expenses, the cost of running a small business can soon become overwhelming.
While there are plans to reform business rates, it could take a while before any major changes take place so it’s important to have a good cash flow system in place. Preparing financial forecasts and considering cost-cutting techniques will put the business in a good position in the long run.
If your business is struggling to keep up with rent payments, it may be possible to negotiate with the landlord to see if, for example, rent can be paid monthly instead of quarterly.
Access to finance
For a while now, many SMEs have found it challenging to secure finance from traditional lenders and banks because of strict lending regulations and barriers. Whether businesses need extra funding to expand or a quick cash flow injection, it can be disheartening when applications are rejected.
Alternative finance can provide much needed funding quickly and efficiently for any businesses across all industries. It’s best to research the market and look for the most suitable product for your business.
Over the last few years, more alternative lenders have entered the market offering asset finance, peer to peer loans, crowdfunding and online business finance. Assetz Capital, ArchOver and Funding Circle, for example, all provide a platform for businesses to secure working capital from various investors.
Depending on the service you provide or product you sell, you could have one to two competitors or possibly hundreds so it’s vital you set your business apart from the rest and have clear unique selling points. Marketing can be tricky for small businesses, especially if the budget is tight but there are ways to stand out from the crowd.
Keep ahead of competitors by continually researching your target customers’ likes and dislikes, their thoughts on prices and their expectations of your service or product. It’s also a good idea to keep a close eye on the competition and see what they’ve done well and not so well.
Ensure you make good use of all the free services available to you, like social media and local networking events to spread the word about your service or product. If possible, give presentations or free demos either online or at events to show what the business can do for its customers.