The challenges small business owners face don’t just stop at Covid. In the current economic climate, costs are on a steady rise while revenues remain stagnant or fall even further. This is especially true for businesses that primarily serve local markets with limited options for diversifying their revenue streams.
With prices of goods and services going up due to inflation, it can become hard for smaller firms to compete with larger ones who have easier access to more resources. While adapting to new regulatory changes can help maintain profit margins, such as switching from selling physical items to offering digital purchases online, this doesn’t necessarily address the issue of higher expenses.
2023 will be an exciting but trying year for small businesses everywhere. Understanding these challenges will be essential to success in 2023.
Increased Competition from Established Businesses
It’s no secret that entering a new market is always a difficult undertaking regardless of your size. Even capable businesses with solid foundations, experienced management, and established capital can struggle to compete in developed markets.
However, as a small business, there are still ways to get ahead. Understanding the competition and working to differentiate your business can help you stand out. Taking advantage of digital strategies and leveraging relationships with local partners can give you an edge. Even if you’re entering a crowded market.
Increasing Brand Awareness
Many companies discover that having a unique personality or commitment to their clients can pay HUGE dividends. Particularly with improved customer loyalty that manifests in long-term, profit-driven relationships through brand awareness.
There are MANY ways to spread brand awareness, but we found the three most successful were blogging, PR, and co-marketing.
- Blogging: Crafting a dependable, premium blog will help amplify your brand visibility. Driving more visitors to your website and converting them into leads.
- PR: the practice of managing the communication between an organization and its stakeholders. It involves utilizing various tactics such as media relations, crisis communications, content marketing, and influencer management to shape public perception in favor of the organization.
- Co-marketing: By joining forces with another enterprise, you will acquire a significant share of their credibility and standing while also creating passionate brand ambassadors beyond your circle.
Another worthy strategy in the small business toolbox is placing a heightened emphasis on digital lead generation. More specifically, it’s about generating enough high-value leads to keep your sales team growing. Marketing agents identify lead generation as one of their top priorities.
Consequently, it is imperative to generate leads that are of both premium quality and vast quantity. While this does seem rather grim regarding the art of lead generation as a whole, it also highlights a potential area for growth.
Securing more leads starts with optimizing your website to drive conversions.
Take a serious look at your site and ask the following:
- Does each webpage guide users to take specific actions?
- Have you created dedicated landing pages for all your campaigns?
- How are you gathering customer information? How can you improve on it?
- Have you added effective Calls to Action on all your web pages?
Expansion Challenges Faced With Growth
Even when a business isn’t dependent on its founder, there will come a time when the issues from growth can be just as imposing as their benefits. As the business expands, it will need to create additional organizational structures, implement new processes, and delegate authority.
This is a tough one because every business situation is unique. This issue appears in just about every single area of business. From development, content, marketing, creation, hiring, etc.
Business executives often prioritize growth over everything else, regardless of the cost. However, if your organization expands rapidly, you’ll need to recruit expeditiously in order to keep up. This can lead directly back to the issue of finding the best talent.
Moreover, it is not uncommon to be excited about landing a big client and the potential that comes with it. Unfortunately, being able to live up to their expectations can become quite arduous This presents another challenge for small business owners: scaling without sacrificing quality.
Scaling without sacrificing quality is the key to success for small business owners. With a strategic approach and the right tactics, you can ensure staff turnover is low and that your venture is on a steady path to growth. Make sure you have the right financing in place when your business starts
Balancing Quality and Growth
If you want to be successful, you must deliver outstanding customer service and pay great attention to detail. However, this can often become so demanding that small business owners find themselves unable to grow.
It may seem counterintuitive, but companies can be overwhelmed by their success. With exponential growth comes a flurry of commitments, numerous contracts, and mounting orders. All requiring greater cash flow need to meet day-to-day financial obligations such as bills, payroll, and supplies.
This does tend to be a theme regarding challenges that small business face. You must have the right financing in place when your company is skyrocketing. If not, you could find yourself unable to keep up with the pace of business due to insufficient funds.
The core principle of this trap is finding the right balance between perfectionism and cutting corners. Ensure your ventures have steady progress without damaging the reputation of your company. It’s up to you as an entrepreneur to establish what this balance looks like in practice!
Finding Qualified Talent in a Shrinking Labor Market
50% of business owners surveyed by CNBC stated that their biggest obstacle was finding quality labor.
This is a difficult number to reflect on, especially since most issues can’t be resolved without an efficient team who understands business objectives and are able to effectively collaborate together in order to meet them.
Attracting quality candidates is a troublesome task for 76% of hiring staff, and the cost of onboarding can consume an average budget with its whopping $4,000 price tag per new employee. In fact, if you have high turnover in your workforce due to failed recruitment efforts, all that money spent on acquiring talent becomes increasingly unwelcome.
Finding qualified candidates
As everyone knows, finding the right people for vacant positions has become more and more strenuous. The data suggests that in 2023 there will be an insufficiency of workers to fill job openings. With a current US unemployment rate of 3.7%, we have almost reached full employment! This goes to show you how necessary it is for your business not only to stand out from its competitors but also to convince these potential employees that this new opportunity is truly worth pursuing.
Increasing competition for qualified employees
From a marketing point of view, competition may be good for business. But when it comes to recruitment, the stakes are much higher. Recent evidence shows that hiring people has become increasingly competitive; you not only have to compete with your candidate’s current employer but also with other companies vying for similar talent as yourself.
While challenges continue to evolve, small business owners will have to stay ahead of the curve if they are to remain afloat and thrive in the 2023 economy. It’s important to keep an eye out for new trends that could impact your business in the future and be ready to adapt accordingly. Regardless of the challenges aside, with a well-planned strategy, businesses should still stand a chance of success. With the right mindset, you can look past even the toughest challenges and continue making progress toward your goals. No matter what challenges lie ahead, anything is possible with hard work and dedication!
Small business owners should always remember that every new challenge is an opportunity to grow and succeed. The challenges of 2023, are no exception. If faced with a proper strategy in place and can be overcome and used to our advantage.
If you have any more questions please contact one of our financial advisors today.