If running a business were easy, everyone would do it! No, this is hard work: between managing employees and figuring out how to attract customers better than the many competitors that are also competing for that same small pool of potential customers, it can be a real headache to keep your head above water as a business owner.
Small businesses (10 – 50 employees) are particularly difficult to run. It’s so hard that most small businesses don’t make it to 5 years before they fail, and those that do succeed only see meager, if any, profits for a long time.
Let’s go over the 4 most common issues that small businesses face and how they can overcome these problems to not only stay open, but also make enough money to make all the trouble of running a business worthwhile:
Not Charging Enough for Goods and Services:
It seems like simple economics that if you’re a small shop in a world of Walmart’s and Costco’s, you’re going to have to offer low prices in order to attract customers. Slow your roll there, cowboy. You have to strike an appropriate balance between low price and profit margin, lest you price yourself out of business. Don’t feel greedy about imposing a high mark up on your products: only businesses as big as Walmart and Costco have the infrastructure to make money with low prices and a microscopic profit margin.
Bad Marketing:
When it comes to a logo and an overall graphic design and color scheme for your brand, you’ll be wise to heed this advice: keep it simple, and keep it clearly defined. Think of the most successful companies of all time, like Nike. Nike’s logo is little more than a stylized check mark. And yet, this simple shape serves as the perfect logo for an athletics product manufacturer. It embodies swiftness, smoothness, and motion; adjectives you would associate with an athlete.
Hire a good marketing agency that can come up a similar idea that is both simple and is a fitting symbol for what your business does. Also, pick two or three colors for your brand and stick with them. Anything more and you will have too much going on to stick in the heads of customers.
Unrealistic Expectations:
Everybody wants to be the next Bill Gates or Steve Jobs and hit the IPO jackpot. And they want it immediately. As we said earlier, most companies don’t even make it past the 5-year mark, let alone become tropical island dwelling, Bengal tiger owning multimillionaires. If you’re lucky enough to make significant profits over a period of time, be sure to save some of it for rainy days rather than staking it all on risky investments.
Not Enough Market Research before Product Releases:
When you don’t have a huge amount of funding, it can be tempting to skimp on market research and save as much money as you can in the process of developing and releasing a product or service. Who needs market research anyway? You know enough through direct contact with your customer base to not waste money on a bunch of stat-crunching eggheads, right?
Wrong. There’s a reason why every major company does oodles and oodles of market research before they roll something out. Whatever it costs to perform market research will pay for itself with a product more finely tuned to customers’ needs, resulting in extra sales and additional customer satisfaction.
Looking for more information to help you succeed as a small business owner? Give us a call at (604) 986-8170 or send us an email at info@compunet.ca.
