When you are your own boss, you assume all the responsibility that comes with it. Sometimes you will find yourself soaring with the eagles, sometimes you won’t. Much has been made of the special type of person who is capable of being self-employed. It is indeed a rare breed of person that can take the initiative in a dynamic market, and chart his or her own course accordingly.
At times, small business ownership, whether it be a sole proprietorship, Close Corporation, freelance work, or an S-Corporation is tricky business. The stability of a fixed salary, or a fixed hourly wage evaporates the minute you decide to go it alone. This means that you are the master of your business universe. How much you put in determines how much you get out. Small businesses cannot afford to sleep, lest they lose out to their competition.
Some of the challenges facing small business owners include the following:
1. Mediocrity
When small businesses are simply going through the motions to get the job done, they do not distinguish themselves from the competition. This may work for a while, but it will not set you apart from your competition. Operational small businesses are geared to be dynamic, innovative, cost-effective, and efficient. Companies and individuals that contract your services as a small business are looking for something that shows you are not mediocre. Anyone who performs above expectations is always recognized and praised for their efforts.
2. Price
Price is a tricky one. Sometimes small businesses will try to lure their clients by undercutting the competition and providing a cost-effective service. This will work if the quality of the product or service meets client expectations. However, it should be remembered that customers and businesses will be prepared to pay a higher price if you are able to distinguish yourself from the competition in terms of service, product quality, and customer-centric focus. Many companies have been built on a higher-priced model of operations, and this does not deter clients from using their services.
3. Focus
Businesses that focus inwardly are more likely to succeed in the long term. By this we are referring to reinvestment, retraining, reengineering, refinancing operations etc. All manner of options are available to you as a small business owner, whether you are a freelancer or an SME. If you do not plan for your business’s growth and expansion, you are accepting the status quo. Every business should realize its full potential by delegating responsibility, allocating resources effectively, and providing a growth-oriented environment.
If you know that there is a growing demand for your company’s products and services, you may wish to take advantage of cheap credit right now. Central banks around the world are reevaluating their monetary policy vis-à-vis interest rates. When interest rates rise, the cost of borrowed capital increases, adding to your burden as a small business. It’s better to lock in credit financing now, to grow your business before rates rise. The money can be put to better use over the short to medium-term and generate substantial returns for your company.
4. Creativity
Not every business is creative per se, but every business should adopt a creative approach to enticing clients, managing client relationships, marketing their products and services, and maintaining open lines of communication with internal and external stakeholders. This creativity takes on many forms, and could be something as trivial as a thank you message on all receipts and invoices, a follow-up phone call, email marketing campaigns, flyers, brochures, and video retargeting. Your creativity is what sets you apart from the competition. Use it to your advantage in attracting new business, protecting existing business and confidently forging a path forward.