• Tom Berry

Defeating Those Typical Small Business Challenges



Starting-up is only the beginning!

Starting a business is a significant achievement for many entrepreneurs, but maintaining one is the ultimate challenge. There are many common challenges businesses face, whether they are large or small, and we aim to cover off some of the problems we have experienced and ideas to help.


The truth of the matter is around 20% of small business fail by the end of their first year and 50% by year five... and by year ten, 80% go under! Why do we bother starting up in the first place when faced with such business survival odds? Forewarned is forearmed my friend... if only we all knew what we know now when starting up.


The good news is there is a ton of insight available that points to the common business problems small businesses tend to face, and none more so, than during those early start-up years. Some of the bigger companies also face some of these challenges, so failure is not discriminatory and can also be part of the learning process and business journey many business owners/founders and leaders face.


One thing guaranteed is you won't get it right first time and it will feel like a rollercoaster ride with highs and lows daily, resulting in the need to adapt strategies and tactics and go again.


Hopefully this is not a depressing opening message so far, but it starts with a dose of reality. The rest of our blog below touches on some key challenges and considerations to help you fight the start-up, scaleup and business maturity phases you are likely to experience and hopefully help you prepare for in advance.


Customer Acquisition, Lead Gen and Superior Service Delivery



Brand Recognition


In terms of success, building a brand and audience is more valuable than direct sales, and, because of this, marketers' primary goal for running marketing campaigns should be about building brand awareness.


Building awareness can help create the important know, like and trust factors with your audience, prospects and customers. This will help align and associate with the products and services you provide. At the end of the day if customers don't know who you are, how will they buy from you?


The important thing here is to develop strategies for spreading the word about your brand and building an excellent reputation that you can leverage right away! This will lead to brand recognition with your audience, and this will make your marketing and sales efforts much more effective in the long run.


Pro Tip: Partner up with other brands to get a leg up on awareness and maybe do some co-marketing activities. Source and leverage some industry PR possibilities. Start blogging and establish your authority and it will also help with drive traffic to your website.


New Customer Acquisition


You could say that this is a general business problem for small and large businesses alike, but it can be life or death for the start-up and small business. The challenge small businesses have is the brand is a bit of an unknown and there is the additional challenge to get the word out there to your right target customers using the most appropriate channels, strategies and tactics.


Throw into the mix how much budget is available to promote, advertise and frequent the right places to acquire new customers, then you start to realise that this is the dilemma - start-up / small business, limited resources and need to get new customers. The cost of acquiring new customers is significantly greater than retaining and continuing to sell to an existing customer - the fact is with existing clients you need to make sure you have a retention and sales expansion plan where appropriate, as losing them too soon could have serious impact in continuing to invest and grow your business. Approximately 50% of companies state that customer acquisition is their primary marketing goal.


Pro Tip: Establish Buyer Personas of your ideal customer and make sure you target the right people


Lead Generation

Generating enough leads to keep the business drive, team aligned and motivated is vital, otherwise the business will stagnate fast, and the lifeblood will be sucked from the organisation. It should be a top priority to make sure you have practices in place for lead generation and not just expect the phone to ring or website enquiry form to be submitted. At the same time, lead generation is a key challenge that businesses face and could be a make or break in terms of longevity and success.


Generating leads that are both high quantity and high quality is an important objective. A successful lead generation system and methodology will convert website visitors into prospective customers and provides a steady stream of sales prospects round the clock!


Pro Tip: Make sure your website is ready to support conversions and that it's clear what's on offer and what call to action you want your visitors to take. Take advantage of some free / affordable marketing tools.


Delighting Your Customers


At Autus we realise the importance of customer retention for a small business and have developed a model that helps us focus across the entire customer lifecycle, so that we maintain a balance towards new customer acquisition, customer retention and expansion activities. In fact, we use this same model to help our customers acquire and retain more clients. We call it our Attract, Engage, Sell, Delight and Expand model (AESDE - not the best acronym I hear you say, yep, I agree!)


The important thing here is (models and methods to one side) is it's vital to have customer retention and satisfaction as a key goal and have strategies to not only retain your customers, but go that extra mile and delight them, you won't regret the multiplier impact that this will have for your business in way of more sales and referrals. The bottom line is:

  • Positive customer service experiences will encourage additional purchases and repeat loyal customers spend more

  • Satisfied customers engage in word-of-mouth marketing, helping you with your new customer acquisition challenge

  • It’s cheaper to retain an existing, satisfied customer than it is to acquire a new one

The challenge above is not so easy within the landscape of a start-up and small business due to limited time, few people, lack of investment possibilities, processes & systems are not in place. It's vital that you find a way to be different and the way you do that is you must surpass expectations and deliver an unmatched experience.


Pro Tip: Implement customer testimonial reviews, satisfaction feedback surveys and continue to evolve the customer experience. Go above and beyond and bring in surprise value! Free eBook.


Customer / Product / Service / Industry Mix



Diversification is the key to many things in life, whether you be investing the stock market or recruiting a workforce, it brings leverage and balances risk. For example, if you have a single client that makes up more than have of your income, you're more likely like a freelancer or contactor and almost like an employee of that customer's business and all your eggs are pretty much in one basket. Of course, let's not knock having a good key customer, but the risk is with your business and not them, they can flick the on / off switch when they want, and you are left with over half your income gone...more of a challenge if you have employees and all of your costs are dependent on this key relationship.


The same is true of the products / services you provide, if market, economic, political, technological, societal or legal forces determine all of a sudden, your product / service can't be provided. Or from an industry perspective let's say you only provide to the Restaurant industry (Think the impact of Covid!), your business might have closed overnight. If your business model allows, or even if it doesn't, find a way to have multiple income streams and not be dependent on single clients / products / services / industries.


Pro Tip: Assess your current offerings, customers and industry mix and review it for known/future risk and diversification. Try a simple PEST analysis to see if it uncovers risk in our existing customer/services/industry balance. Focus on not having too many big eggs in the basket.


The Founder Challenge - Burnout, Dependence, Quality & Growth Balance



Running a small business is challenging enough without adding one more thing to it, right? As a small business owner myself, I can attest to this!


The hours, the work, and relentless pressure to deliver wear on even the hardest working and passionate individuals. Many business owners get stuck working much longer hours than their employees. They fear the business will stop in their absence, so they avoid taking any time away from work to recharge. Customers also come to expect the business owner to be on tap when they call and that can be a challenge to introduce new employees into those business-to-business relationships that have become person to person.


Fatigue can lead to rash decisions about the business, including the desire to abandon it altogether. Finding a pace that keeps the business humming without grinding down the owner is a challenge that comes early (and often) in the evolution of a small business.


Many businesses suffer from founder dependence, and it is often caused by the founder being unable to let go of certain decisions and responsibilities as the business grows. Even when a business is not founder-dependent, there comes a time when the issues from growth seem to match or even outweigh the benefits. Whether a service or a product, at some point, a business must sacrifice to scale up. This may mean not being able to personally manage every client relationship or not inspecting every single product or service before it is delivered. Scary, yep...been there!


Pro Tip: Don't obsess with perfection and all the little details, empower new team members and maintain the focus on the customers and creating a high performing team.


Scaling The Business



It's a difficult balance to build for tomorrow versus having to deliver what's on your plate today! At the same time, it's vital to be proactive in developing specific areas of the business, such as product development, sales, marketing, customer service, finance and recruitment etc.


Many businesses will push growth at all cost, but this will generate growing pains and you will have to recruit to support the growth and that means you have to find the right talent and so on, and that's when the other challenges above/below start to manifest themselves.


Pro Tip: Both quality and growth are required, so keep resetting the balance.


Cash Flow (Money Management)


Cash is King! Having enough cash to meet your overall costs is non-negotiable, otherwise you're already on the slippery slope to the percentage of business failures. Running out of cash makes growing a business impossible, so it's vital to plan start-up and running costs and build up sufficient cash reserves to support your plans. Your business might not make any money in the first few years, have you planned for that? You might need other income streams or investments while your business gets going, keeping that existing job for a while yet and working more hours to keep the other income streams and business plates spinning at the same time.


Make sure to seek the support of a good accountant, bookkeeper or/and tax adviser as you go, as you will need to get familiar with the various financial elements of running a business so that you can continue to scale and grow.


Pro Tip: Don't mess with this, seek advice if financial aspects of running a business is not your thing!


Processes, Systems and Workflow Management


You will need to ensure that your team has the processes and tools to do the job efficiently and effectively. A common challenge for small businesses is how to effectively manage workflow, more so as your business scales. This is where it's key to start to consider the various processes in your business - sales process, customer delivery and service processes, marketing execution etc. Fortunately the technology and tools available these days is a huge enabler to help with automating and optimising elements of your sales, marketing and customer service.


As the business leader starts to give up some responsibilities, the process in their heads needs to evolve through systems and documented procedures/processes, so that any new team members can work to the standards expected.


Pro Tip: Establish a good customer tool early to start building contact information and email addresses to support your service delivery, scale and growth next steps.


Recruiting The Right Talent


A significant problem for any business, far or less, start-ups and small businesses, is the ability to find the right talent, onboarding new employees, creating the right working environment and enabling them to thrive within your business. The bottom line is it will be impossible to address all of the challenges listed here (and more!) without building a high performing team that are aligned and driven for success.


Note that you don't need to hire permanent employees to begin with, start to consider using freelancers or selective outsourcing activities that you don't have experience in and require help. e.g., Could be you need an Administrative Support, Marketing Support, Accountant... all of these professionals can provide a service on a fee or retainer basis and can keep your cost/risk in balance as the business evolves.


Pro Tip: Don't settle for average or good when great employees exist. Recruit slow and fire fast.


Final Reflection



While these are just a few of the many business challenges facing small businesses every day, there are many others out there. Many of them can be planned for and mitigated with the proper planning and strategy.


Final Pro Tip: Surround yourself with good advisors and experts in different fields - finance, business strategy/coach, marketing and sales.




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About Autus


Autus provide Revenue Growth Platforms, Marketing & Sales Automation and Digital Marketing services to help sales and marketing personnel and teams build efficient and effective sales and marketing best practices and automate their marketing and sales processes by leveraging personalised content, various digital marketing tactics, segmentation and behaviour of their prospects and customers. Find out more here.


Autus provide a done for you social media management service for clients that don't have the time or know-how. Find out more here.


Our founder, Tom Berry, also provides selective fractional CMO services and is a member of some client boards.


Let's keep in touch!


If our team at Autus can help advise further, please don't hesitate to get in touch with our founder, Tom Berry.




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