There is no good thing you would want to achieve that doesn’t have challenges backing it up. Even negative pursuits encounter challenging times. Starting a business and successfully scaling it will seem daunting most times. From regulatory problems to financial headaches and logistics, small-scale businesses will always have challenges.
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These obstacles have a way of limiting the business, causing it to not reach its highest potential. However, the first step to surmounting these challenges is to be aware of them. Here are what I consider the top five (5) challenges of small-scale businesses. But don’t fret, these problems have solutions.
Government Regulations
Government regulations stand out as the top challenge any business owner can face. In fact, virtually every other thing is hinged on it. If the government does not make the trade environment favourable, how will small businesses survive? We are familiar with the government giving certain companies or industries the monopoly to manufacture a particular product or render a particular service. This puts the upcoming service providers at risk of having little or no market share for that particular product/service.
The taxation system also plays a huge role in the survival of small businesses. When the rates are high and unfavourable, small businesses tend to suffer it the most. Land revenue and other laws that guide the establishment of small businesses also affect these businesses negatively if they are not favourable. The government should, however, try to consider small scale businesses in the event of passing trade laws.
Funding
This could easily pass as being a part of the top 5. Finance is generally the bedrock of every business. You can have a great idea for decades, but without money to fund the idea, the idea ends in your head. So much can be done with money, and in this case, any small-scale business can start and grow when funds are made available and are utilized effectively. Lack of funding poses a great challenge for small business owners, since they most times depend on their savings and little grants here and there, to survive. In all, these small business owners do all they can to break out of this challenge.
Inventory Management
Managing inventory is another great challenge for small businesses. Due to the fact that it is a small business, there will be so much mechanical or manual effort in place. And this does not always work efficiently. The cost of procuring computers and machines to aid inventory management is enough to wear out a small-scale business. This results in resorting to manual means, which is not effective. The business, nonetheless, should make efforts to employ software or systems that can effectively manage inventory for small businesses. Despite the extra cost, it will go a long way in making sure that this problem is solved or at least, minimalized.
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Employment
This is a broad word. It entails recruitment, firing, re-hiring and the overall maintenance of staff members. The challenges of employment could include the loss of valuable employees and hiring the right persons for the right positions. Small businesses, especially start-ups, often run the risk of losing their valuable employees, because they are usually unable to pay them well.
On the other hand, qualified and skilled job seekers are less likely to apply to small businesses, having these businesses sweat to get the right candidates for the job. Small businesses can push themselves out of this challenge by rewarding and encouraging the good eggs as much as possible. This will keep them interested for longer. Empowering the employees you already have to do better and become more for themselves and your business will also do the magic.
Faulty Marketing Strategies
The main aim of your business is to make money. And to do this, a robust marketing strategy should be applied. This will enable your business to gain a reasonable market share and give room for revenue. However, some small-scale businesses are getting it wrong. Since they don’t have huge marketing budgets, they need to maximize the little they have to get quality output. As much as can be invested, these businesses should invest in quality content and social media marketing, amongst others.
Now you’ve seen the top 5 challenges of small-scale businesses. As a small business owner, what is your greatest challenge and how are you dealing with it? Reflect on these things and put strategies in place to surmount them. That your business must blow!
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