5 challenges facing SMEs in 2017

Sage plays an active role in the small business and entrepreneur landscape, naturally, as our accounting software solutions are tailor made for them! We put a question to the community:

As a small business owner, what is the biggest challenge you’ve faced this year?

Along with responses from our own community, we also collaborated with the Female Entrepreneurs South Africa Support Group, who shared their top entrepreneurial challenges with us.

Here are the top 5 challenges faced this year, along with our top Sage Advice:

1. Collecting customer emails

 Sage Advice

Growing your database of customer, or potential customer, emails for ongoing email communications is a great way to keep your business front-of-mind. But quality is key. There’s no point in purchasing a list because you’ll be sending out your well-crafted e-newsletters straight to spam. Practice these simple tips and you’ll be able to build a list of highly engaged, and welcoming, customers. To suit different businesses, we’ve divided our tips into offline and online methods.

Offline

For brick-and-mortar stores, it’s likely you have a sign-up sheet already sitting on the counter, so customers can opt-in when they pay for their items. Instead, catch your browsers at an earlier stage of their decision-making process. They’ll be looking around your store, so position your email sign-up sheets around the aisles. A catchy headline works a treat, and you can choose to include an incentive for their email, which will both encourage them to sign-up, and also to buy that item they have in their hands. “Join our mailing list for 10% off your purchase today”.

Online

On your website: Most websites embed a newsletter sign-up box on the homepage, or as a pop-up. However, online business specialist Ramsay of Blog Tyrant suggests you move you email collection invite to your ‘About’ page. He saw a huge increase in his sign-up rate when he moved his. It seems, according to Ramsay, that people want to subscribe while they are reading about you, (or your business).

On social media: If social media is part of your marketing strategy, make sure you post a call-to-action and link to your online sign-up form. Pin it so it always features at the top of your profile, and doesn’t get lost in daily posts.

Facebook has created a specific advert format called Lead Ads that allows you to collect email addresses. Read up on what works well, and invest a small test budget to trial some contests. You can include an incentive for customer emails, such as a free quote, or a discount code.

2. Admin, admin, admin! And finding the time to do it

Sage Advice

Simply put, admin is any task you do in your business that doesn’t directly, or indirectly, generate income. So the least time you spend on it, the better. That said, you need to keep a clean shop. Here are our top tips for reducing time spent on admin, so your time can be better spent making money.

Use technology! Digital tools can save a lot of time. Some are free, others you have to pay for, but it’s worth a small upfront outlay so that you get those few extra hours a month to spend on money-making activities. Check out:

• Sage Business Cloud Accounting has a mobile app that lets you create and send invoices on the go, so you can bank money for your business anywhere, even in a taxi. 
• Pegg is an intelligent chatbot for your phone that keeps a real-time record of your expenses. Just take pictures of your receipts and send them to Pegg. 
• Task management app Basecamp centralises your team’s ‘to do’ lists, tracks project timelines, provides cloud storage to share files, and keeps your calendar. 
• Need to track mileage for work expenses and/or your tax assessment? MileIQ not only tracks your mileage, but generates mileage reports, including other road expenses such as tolls.

Not so comfortable with technology? Hire a virtual assistant. Virtual assistants can take time-consuming admin tasks off your hands. This includes bookkeeping, data entry, sending follow-up ‘thank you’ emails to customers, or research tasks. As of October 2017, the average hourly rate for a virtual assistant is $15.58. So write a list, evaluate which tasks would be better outsourced, and look online for a cost-effective and experienced VA to help you.

3. Finding the marketing avenue that works best for my business. Usually, it’s been trial & error

Sage Advice

Look at your closest competitors; are they doing well? Where do you see them most active in their marketing? A thorough competitor analysis will give you some great insights into what will best work in your industry. If you don’t have the time, hire a virtual assistant to put in the hours for you, and create a report. This should take out some of the trial and error.

Reduce the gamble with joint marketing ventures

You can partner with businesses in complementary industry sectors when you try a new marketing channel. This spreads the investment risk. First, identify products and services that do not directly compete with your business, but complement yours. For example, if you run a small hotel, build relationships with service providers in the local tourism industry, a local restaurant, spa, or museum. You can offer a local tourism package and try different marketing channels with your combined investment, to see what works best.

4. Finding, (and winning) clients who pay a premium

Sage Advice

Provide proof

To inspire confidence in high-end clients, make sure your other high-end customers are visible. If you already have established big brands and premium clientele in your customer base, ask them for testimonies to include on your website. Or ask if you can use their logo in your communications, even if it’s just in your email signature. These visual cues help potential clients feel like they’ll be joining an elite pack.

Have a make-over

Whether you own a business or are a solo entrepreneur, how do you represent yourself? Put yourself in the shoes of a high-end client and take an analytical look at your communications. What do they see? If it is low-quality images on your website and a business address @gmail, then it’s time to improve your online identity in line with what premium clients expect.

Charge a premium

Truly premium customers will run away if your prices are too low, seeing it as a signal of poor quality. Psychological studies have proven that increasing the price of a product or service increases its perceived value. So, raise your prices to a premium level, and stick to your guns. If you need to be competitive, then add more value to the client by offering a small complementary service or product for free. This will be seen as a sign of premium service to high-end clients, rather than devaluing your core product.

5. Keeping up to date on best practices and new technology

Sage Advice

Few small business owners have the time to research articles, read reviews, dig deeper, and decide what to implement. This is especially true in the digital realm, where technology is constantly changing.

If you have a small team, divide and conquer. Make a list of the key areas for your business that you want to keep up to date with. This could be things like best practice for SEO for Google, updates to Facebook’s algorithms, or AI applications. Whatever you decide, delegate a topic to each person, and make it part of their job function to stay up to date and create a small monthly report of ‘need-to-know information’. You can sit down once a month and review.

If you are a solo entrepreneur, put in a little research time upfront to look into relevant podcasts on topics you’re interested in. Podcasts are great because you can fit them into your life around work. Listen to them over breakfast or in the car. It will help you stay informed, without taking too much time away from the business.