When small businesses first get started, they come across many different challenges. Some of those are more difficult to overcome, and according to the U.S. Bureau of Labor Statistics, by the end of their first year, about 20% of small businesses close their doors. Those challenges don’t stop — by the end of their fifth year, 50% go under, and that number rises to 80% by the tenth year.
At those rates, it’s easy to understand why small business owners face those first few years of business with trepidation. However, many of those typical business challenges are fixable.
Read on to learn about the top three challenges small businesses face and get some tips on how to resolve them.
Transitioning to a Digital-First Landscape
Having an online presence is more essential than ever, especially for small businesses that want to stand out. It can be difficult for small businesses to keep up, considering they have fewer resources than many larger companies. As more businesses take their services online, small businesses must adopt technology that helps them stay competitive with their larger counterparts.
However, it’s not just about improving productivity internally. It’s also about integrating the tech solutions that will allow you to thrive in competitive industries like eCommerce by improving customer satisfaction, branding, and more.
Research what your small business needs to have a digital transformation and get up to speed with the latest tech features. There are many resources available to small businesses to assist in their transition. For example, Mastercard’s Digital Doors is a great resource whose purpose is to help small businesses open their “digital doors,” ensuring you have the tools you need to get online.
Access to Business Capital & Cash Flow
Money problems hold a business back like nothing else. While this is true for larger corporations, this is even more true for small businesses. Entrepreneurs who cannot start their business with a safe source of capital usually come from middle- and low-income backgrounds and communities. This often presupposes lower credit scores, high-interest-rate loans, and few, if any, assets to liquidate for investment in their business.
While most larger companies have enough cash on hand to keep the lights on and keep up with payroll, small businesses are often in a less stable situation. Small businesses regularly report that a lack of capital or cash flow is their number one challenge. In addition, small business loan approval at traditional banks is significantly low — 13.5% as of March 2021.
To improve your chances of securing financing, it is vital to understand how small business credit works. If a traditional lender is not an option, you might want to explore alternative sources of capital or investors.
Additionally, Markaaz will soon implement new features that will increase access to financing and reduce the friction in payments. This will all be integrated into our pre-verified directory for small businesses, which allows you to find new suppliers and business partners and monitor them over time.
Attracting & Retaining a Quality Workforce
According to a CNBC study, 52% of small businesses see labor quality as the most significant problem facing small businesses. This is a grim statistic, especially since a small business’s day-to-day challenges can’t be resolved without a hard-working team that understands business goals and can work together to meet them.
To top it off, competing with bigger companies for top talent is difficult. Because they have more access to cash, top companies can offer exceptional benefits packages and lucrative salaries. Small businesses may also face challenges with a lack of brand recognition, minimal recruiting resources, and no formal recruiting process.
It may seem like hiring is easy: send out a job description, screen applicants, and decide. However, this is a short-term way of thinking and can lead to inadequate research into your potential talent. You shouldn’t settle for good employees when you can find great ones, even if it takes longer. The great employees are the ones who will help your company get to the next level.
Take ownership of attracting candidates to your company and make them interested in learning more with a solid brand identity. Employer branding plays a critical role in hiring and attracting top talent. Brand identity is necessary for two reasons: it helps potential candidates feel excited about the possibility of working for a small business, and the employees that you do have will feel proud to be a part of your company. Build your brand, and quality employees will be attracted to your small business.
The Bottom Line
While these are just a few of the many challenges facing small businesses every day, many others are out there. However, the majority can be planned for and mitigated with access to the proper tools.
At Markaaz, our goal is to simplify your business processes so you can get back to business. Markaaz is the world’s first platform to enable small businesses to discover new suppliers, manage them, and improve their cash flow. The 119M+ companies listed on our platform are pre-verified and undergo rigorous verification to ensure authenticity, legality, and good standing. Finding and maintaining a trusted network of suppliers is a full-time job in itself, which is why we pre-verify all the businesses on our platform. We are also in the process of building an all-in-one dashboard, helping you pare down the tools you need for your business to function smoothly.
Join Markaaz today to gain access to our transformative features.
Casey Pontrelli, Content Manager
About the author: Casey Pontrelli is a multi-talented professional with a background in content creation, branding, and social media marketing. Whether writing for a newspaper, eCommerce website, B2B startup, or a marketing agency, she has taken her strong background in journalism and turned her focus to SEO and content marketing. She’s written about everything from boutiques to cars to online lending, but she’s especially passionate about supporting small businesses and giving them equal access to opportunity, which is why she’s a proud member of the Markaaz family. When she’s not writing up a storm or creating eye-catching social media graphics, Casey enjoys hanging out with her two cats, Eddy and Larry, going on long bike rides, and, predictably, reading.
Follow Casey on LinkedIn here.