Small businesses are the key to the success of the American economy and rely on various resources to thrive. However, these companies face risks and challenges that differ from those of more giant corporations. Here are the top five issues small businesses have to tackle at one point.
Struggles of Running a Small Business
The biggest challenge small business owners face is that they’re at a disadvantage. They need access to big companies’ resources, expertise, and staff. They often struggle with these problems. For example:
- The lack of resources – Small businesses need access to resources for crucial things like research and development, introducing the latest technology, introducing new products, etc., which can further hurt their productivity.
- The lack of expertise – Small businesses need more experience handling large-scale projects, strategic planning, etc., which might turn into a costly, irreversible mistake.
- The lack of access – A small business owner may be a visionary and an expert in their industry. Still, they have different access to information about what’s going on in their field than big companies do. They certainly aren’t invited to exclusive conferences where they can network with other professionals in their industry. This puts them behind the rat race.
- Access to industry experts – Small businesses need access to the same type of expertise as big companies do. 80% of small businesses don’t have any staff at all. They can only afford to hire specialists in some areas and rely on them for advice on how best to run their business.
Such a disadvantage can hurt a small business for years to come.
Cybercrime Threats
Cybercrime is the last thing on the minds of small business owners. After all, it’s still a relatively new threat to most small businesses in the United States. No wonder just 5% of small businesses consider cyber threats as their top priority, and the rest neglect the danger. But you must stay vigilant. Cybercrime is a real threat to all businesses, regardless of size.
Cybercrime has been around since the Internet’s inception and continues to grow in scope and scale as hackers find ways to access personal information from computers and mobile devices.
The FBI estimates that small businesses lose an average of $2 million a year due to cybercrimes like ransomware attacks, where hackers encrypt your files until you pay them, identity theft, or fraud schemes that siphon money from accounts without authorization.
With so many cyber threats, small business owners must look into the matter. The best measure is to hire the expertise of a professional. An IT professional will analyze your network and computer, find vulnerabilities and prioritize the best way to protect your data.
Hiring an IT company for small businesses is one of the best ways to ensure your company stays safe from cyberattacks and data breaches. The right IT professional can keep you ahead of the latest threats, protect your business and its customers from security breaches, and ensure you comply with industry standards.
Keeping Up with Technology
The second most significant risk and challenge for small businesses are keeping up with technology. This can be tough to navigate, especially if you’re working in an industry that relies heavily on software, hardware, or the internet.
The tech landscape changes fast, which means your company must be flexible enough to change fast. You need people who are constantly learning about new trends and technologies so you can use them to improve your business processes and stay ahead of the competition.
Keeping up with technology also requires a budget. Many small businesses think they need more money for cloud computing or data security solutions. But these things are affordable compared to other expenses like marketing campaigns or equipment purchases.
For example, Google plans on launching cookieless technology in 2023. This could mean significant changes for marketers who use cookies to target specific audiences based on their browsing history since cookies allow websites to track users across multiple devices by assigning unique codes.
This change could impact its marketing operations and revenue if Google goes through with it. To ensure businesses keep running smoothly, marketing firms must find an alternative to this and keep targeting people to generate revenue. Or else it will fail miserably.
Managing Growth
Growth can be a double-edged sword. On the one hand, it means your company is successful and profitable. On the other hand, growth can also tell you’re facing new challenges and risks.
Whether you’re looking to grow your company or not, it’s essential to manage your resources carefully to keep growth in check. For example:
- Hire the right people for each job and make sure they have enough training in their field to do their jobs effectively and efficiently.
- Consider whether it is time to branch out into another area, product line, or both.
If PepsiCo (PEP) was not able to wisely manage its growth over time by hiring the right people in various roles across its global operations as well as expanding into new markets like India with products like Gatorade sports drinks, not only would it not be worth $249 billion today but it might even fail altogether.
Communication and Collaboration
Communication is key to success in any business. An effective communication strategy allows your small business to connect regularly with customers, clients, and employees. Communication is also vital for collaboration: working together toward a common goal means that everyone must speak the same language.
Nearly 40% of employees feel their coworkers need to collaborate sufficiently at work, which can cause enormous business problems. Whether getting everyone on board with new projects or just figuring out what tasks need to be done next week, good communication will give you an edge over other companies in terms of efficiency and productivity.
And remember your clients. Your ability to communicate clearly with them will determine their success in using your product or service. If they don’t understand how it works or its benefits, they will look elsewhere for help which is bad news for both parties involved!
Hiring the Right Team
Hiring the right team can be a challenge. It’s easy to get caught up in the excitement of bringing on new hires. However, you must put forth the effort to confirm that they are well enough for their positions.
The first step is knowing what skills and experience you need in each position within your organization. The second step is hiring people who meet those needs. Then, once they are on board, it’s essential to make sure they are using those skills effectively and getting the most out of their contributions as part of your team.
The third step is keeping them motivated and encouraging them to grow accelerated. A motivated workforce tends to be more productive and efficient than one that feels unappreciated, undervalued by leadership, or just plain bored.
Conclusion
Well, that’s it for our list of the most significant risks and challenges small businesses face. As you see, there are several factors to consider while launching or sustaining a small business. But don’t let some of these challenges discourage you from pursuing a dream. After all, the most effective approach to removing difficulties is to simply face them. All the best for your endeavors!
