SMEs have existed for decades and in the past, were what many households depended on for survival. This is not to say that the SMEs that existed before the 21st century did not have their share of challenges. I can imagine that somehow, they came up with strategies that helped them thrive.
This article will explore simple strategies that can be used to overcome the challenges faced by Startup and SME owners all over the world today. As business advisors, our services are geared towards empowering you to scale through hurdles in your way, until you attain your business’s financial goals, and ultimately, growth and expansion!
Startups and SMEs Explained
To quite several people (and maybe even you), Startups and SMEs are the same. Truth is; they are not. There are a few distinct differences between a Startup and an SME. Here’s some explanation to help you understand better:
Startups are beginner companies whose desire to bring a unique product or service into the market makes them a high-risk investment with an offer of equally high returns, and whose ultimate aim is to achieve sustainable growth and scale up to becoming Unicorns! A startup becomes a Unicorn when it reaches a value of $1 billion. Examples of popular unicorn companies include SpaceX and TikTok.
Small and Medium Enterprises (SMEs) are independently owned businesses, with employee strength and annual revenue size within a certain limit, and the primary aim of making a profit.
Here Are 5 Challenges Faced by Startups and SMEs:
Startups and SMEs share challenges in common, including but not limited to:
- Money: Think about staff payroll, machinery and furniture, digital tools and technology, office space and products, and so on. Not having enough funds is sometimes evidence of poor financial management practices and will lead to devastating losses.
- Inadequate information: Having access to little or no information about your business’s niche or market is disorienting. After all, how are you supposed to control a business without knowing your competitors and market demand?
- Skilled labor: Sometimes, business owners are unable to afford the employment of expert staff. For this reason, they may hire persons who do not have enough expertise to handle the roles available. This leads to poor decision-making, which in the long run will also lead to serious losses.
- Finding customers: Most companies launch marketing strategies to acquire more customers. Not having a customer base will be detrimental to small businesses.
- Bad infrastructural facilities: Government-owned infrastructure such as road networks and electricity play a vital role in the longevity and survival rate of Startups and SMEs. Challenges this could pose for SMEs include low levels of production and less sales. For Startups, poor infrastructure and economic conditions may discourage foreign investors.
Bad infrastructure also refers to the absence of, or poor state of machinery, technological instruments, and other facilities needed for day-to-day operation.
5 Strategies For Overcoming The Challenges Startups and SMEs face:
Listed below are five strategies to overcome the five challenges listed above. We hope you apply whichever one resonates with you!
- Adopt financial management practices: By getting accurate information about your finances, you can make the right decisions and implement the best management practices such as budgeting, investing, and forecasting, to keep your business afloat!
Not only that, being a part of anything (events, newsletters, etc) that is targeted towards educating under-informed Startup and SME owners on proper financial management practices and methods of funding also helps.
- Apply every means to get necessary information: Events and workshops are the perfect avenue for you to network and hear all of the important tidbits about your marketing niche. Apart from these events being a veritable source of information, and leading you to your potential clients, they also serve as a chance for you to know and study your competitors!
- Outsource roles: Outsourcing roles help you deal with both the issue of skilled labor, and infrastructure.
Another alternative strategy would be to accept volunteers who are ready to be trained until they are deemed ready to fill the roles they were originally needed for.
- Have an online presence to find your customers: Leverage the internet, especially social media. Take great care to recognize, isolate, and understand your target customers. Know what motivates them to buy products and services, know what they specifically love to see online, and work towards creating your content in that direction. This will drive the audience that needs you to find you.
- Avoid the challenge of poor and inadequate infrastructure: Outsourcing roles, and Retail-used gadgets:
Startup owners, please consider flexible work arrangements such as having virtual workers among your members of staff, and outsourcing some core functions. On the bright side, outsourcing promotes inclusivity and grants you access to talents from other countries!
SMEs need to adopt technology and embrace digital marketing to deal with the challenge of poor public infrastructure. Procuring retail-used tech gadgets to help with operational efficiency also helps you save more even while keeping up with technology.
Why You Should Partner With a Business Advisor To Overcome These Challenges:
Companies that invest in professional business advisory services can foresee and prepare your business for challenges, and if a crisis arises, manage them effectively. Partnering with a qualified business advisor will help you achieve business resilience, overcome obstacles, and guide you to make the best possible decisions.
Business challenges are foreseeable and do not have to be the end of your business. They can be avoided when you take actionable steps and avoid costly missteps. Your business thrives even better when you partner with qualified business advisors like ours. Ready?
Speak to an advisor now! http://www.bizvitalsigns.com/