The statistics of success for businesses are dismal. With 96% of small businesses failing within ten years, and between 70% and 80% of them going under within their first year, understanding why businesses fail is imperative. Contributing factors include lack of innovation, poor planning, and cash flow problems.
It’s not all doom and gloom, though. With the impact that digital tools are having on business owners’ productivity and the workplace in general, you have more access than ever before to the information, resources, and audience you need to join the ranks of the 20% to 30% of South African businesses that are thriving.
Here are four hurdles start-ups face and the hacks you need to overcome them.
Challenge: It’s a safe assumption that, as the owner of a small business, you don’t have as much money to spend on marketing as a large company that’s competing for the same customers. Advertising methods such as radio and print are costly, and their effectiveness is hard to track.
Hack: Affordable advertising is more accessible than ever, thanks to platforms like Twitter and Facebook, and search engines like Google. Preventing overspend is simple because strict limits can be applied, and you’re able to target a specific audience based on their location, interests, and demographics – meaning you get more bang for your limited buck. What’s more, you can also track the effectiveness of your advertising, which enables you to optimise it. While social media is powerful, don’t neglect the importance of your offline connections. Networking is a great way to cultivate trusting relationships with people, which leads to referrals.
Staying on top of paperwork
Challenge: Although you know that tracking your quotes, invoices, and payments on Excel is time-consuming, you might also be hesitant to invest in accounting software. Sure, you’ve heard good things – but you’re not familiar with the packages out there and aren’t prepared to spend money on one.
Hack: By researching your options, you’ll find that not all accounting software was created equally. Finding on-the-go software like Sage, which allows you to quote and invoice from your computer or mobile device, frees up your time to focus on what really matters: your customers. Whip up a professional, branded quote while you’re talking to a potential client, and send an invoice seamlessly once the job is done. You can also keep an eye on your business growth and easily track unpaid invoices.
Hiring people who fit your company culture
Challenge: When your company is ready to expand from more than one or two people, hiring the right team can take your business to the next level. Finding people who are cohesive with your culture is a must, which makes hunting for employees daunting in itself. Not only that, but they need to be willing to earn less than they might at a larger company.
Hack: Tap into your network by letting them know that you’re on the hunt, and who you’re on the hunt for. People who know you and your business are more likely to recommend someone who is a good fit, and it saves you from having to publish an ad or spend money on a recruitment agency. While qualifications matter, attitude and determination are everything. Hire people who are passionate about being part of the growth of the business.
Mastering the art of wearing multiple hats
Challenge: As a small business owner, you’ll need to be prepared to take on roles you never anticipated. Whether it’s fixing a printer, figuring out how to work the new coffee machine, managing finances, or punting sales, the onus is on you. While this will do the trick for a while, it’s only a matter of time before you need people who possess a very particular set of skills. But accountants, HR managers, marketing directors, and IT managers don’t come cheap.
Hack: Outsource to small agencies and freelancers who are familiar with your industry, and who have experience working with small businesses. Not only are they more affordable than full-time staff, but they’ll provide you with advice and a fresh perspective on things. Reducing your workload in this affordable way means you can spend more time on innovating and developing products.
Running a business is no small task. But by being smart with your time and resources, you can survive the first challenging year and make it to the exciting growth years.