By Brian Calhoun
March 12, 2024
No one knows how challenging it is to manage a small business like a small business owner. That’s even more true of the small businesses that survived the pandemic. Many did not. But there’s no consolation prize, and challenges to exist. Here we outline five difficulties faced by small businesses and ways companies may approach them before sharing some small and medium business trends.
Whether your business provides solutions to other businesses or provides goods or services to consumers, you won’t get far without customers. Creating your business, you knew your target market. So where are they? It’s likely they’re out there, and they just don’t know you’re out there.
Examine your current marketing and outreach process. What are you doing to boost your name recognition? Can you squeeze digital advertising into your budget? Are there local events that you can sponsor? It can also help to compare your current efforts with your competitors, or other businesses of your size. What are they doing that you know your business can also do?
Feeling good with the few customers you have? While it’s nice to have a dependable level of work, you don’t want to be left in a scramble if they drop their patronage. Always keep your door open to new customers and opportunities.
Companies are relying more and more on their digital presence for name recognition and outreach. Having a website and social media pages is one thing. Being active with both is another. Engaging with past, current and potential customers online can be fairly low cost. Set up email lists and grow them with giveaways. Find a way to share content that they’ll engage with. It may be hard to tie customer growth directly to your web presence, but using social media wisely can certainly grow your name recognition.
Simply sharing news articles relevant to your industry and customers can be a great starting place for your social media accounts.
Some things an owner can do on their own. Some they just can’t. And some, they could but don’t really want to. When hiring, it’s important to know what your company needs most next. Sometimes that’s an easy decision. When it isn’t, look into areas that require expertise. How would your company benefit from a new hire in one of these positions?
Figuring out who to hire is only one half of the equation and the hiring process requires considerable effort. Consider the role, how it might grow with the company and create a job posting that details what you’re looking for. Don’t be afraid to look at listings for similar positions to get your bearings. When it comes to the interview, know what you’re looking for in a candidate and be prepared to answer their questions about the business.
While we are in “The Great Resignation” keeping employees can be just as difficult as trying to find new employees. Salaries certainly play a role in decision-making, but similarly impactful is any company’s stance on remote work. Even meeting in the middle with a hybrid-remote work model can boost employee engagement. Companies that can offer this to employees should certainly do so. However, just by the nature of their business, some companies aren’t able to leverage this as a benefit.
Reimbursement can also be a large benefit to employers and employees. People using personal devices for business reasons should be compensated fairly. Companies that can offer this benefit will see higher engagement and retention.
Doing well as a small business can be measured in achievements: first hire, 100th customer, quitting your 9 to 5 to go full time. But once those early milestones pass, the future is full of choices. With surplus funds, you can expand in any number of ways. Do you want to put more into the product? More into your team? More into your outreach efforts?
Every business is going to be different, and the right decision may change seasonally. Just beware of over-extending your business and creating holes for yourself. There’s also value in the perspective of the experienced. Look to other small business owners in the area if you’re stuck puzzling over your next move.
Perhaps the biggest difficulties faced by small businesses surround finances. Some businesses rely on funding from investors. Others, foot traffic of the day-to-day consumer. When profit-margins are razor thin, owners look for cuttable expenses in the budget. Again, those areas are going to depend on the business.
Take, for example, companies that depend on vehicle travel for their business. Employers may have purchased vehicles for their employees to drive, or provide them with a monthly allowance intended to cover the price of driving. Both of these vehicle programs, fleet and car allowance, are opportunities for cost control. Employers using a Fixed and Variable Rate reimbursement can remove unnecessary travel spend and reimburse employees fairly and accurately. That’s money that can go back into the business.
Most owners are all too aware of the difficulties faced by small businesses. The problem compounds itself as there are only so many people and so much time in the day. Companies across industries are exploring their options, looking for cost control opportunities. Some options are setting companies up for success. Here are five small business trends we’re seeing in the current market.
As quarantine kicked into full swing, family restaurants that were typically dine-in pivoted to offering take-out and delivery. Many places still have these offerings, and other brick and mortar stores also went down this path. No one can say is foot traffic will ever return to pre-pandemic levels. However, eCommerce provides greater reach and offers more avenues than a strictly in-person place of business.
Many small businesses expanding their online presence are also looking to expand in other ways. Whether it’s a greater diversity of products or altogether new offerings, this is a risk with designs on a reward. Small businesses analyzing how buyers react to provided goods and services and finding success in expansions of the offerings are in a better place than less ambitious competitors.
Losing customers is a nightmare for small businesses, especially when they’ve become a dependable source of revenue. Keeping a customer is no longer as simple as providing the good or service. It’s also a justification of the money they spend, a reminder of necessity. Small businesses can encourage loyalty in consumers with rewards programs. Small businesses targeting other businesses should make connections and explore other ways they can provide invaluable support to their customers.
A company is its employees. Many of those companies learned their employees could work effectively from home during the pandemic. The flexibility this offered has lead many companies to implement a hybrid program. Employees will work from home two or three days each week and in-office on the others. Clearly, this is not an option for all industries. Companies with employees tied to a business location can also offer greater flexibility. This may come in the form of better PTO, phone reimbursements or other benefits. Vehicle programs are another opportunity to offer employee benefits. Remember, an engaged employee is more productive and invested in their work.
Whether the operation is one person or a team of 30, all small businesses need the capital to start, thrive and, ultimately, survive. According to a report by Guidant Financial, most small businesses are financed with cash. However, credit, small business administration loans and family and friends also play their part. What does creative funding look like? That depends on the targeted customers. Cryptocurrency may be an acceptable form of income for a web hosting service provider, but maybe not an ice cream shop. Crowdfunding might not gather a lot of steam for a small real estate agency, but it might be just the thing for a unique board game creator.
Small business trends used to favor company-provided vehicles and car allowances. These options either provided a benefit to the employee or were easy to set up. Unfortunately, neither of offering is very flexible. Company-owned vehicles expose businesses to lawsuit risk and car allowances result in tax waste. That’s why many small businesses are switching to a fixed and variable rate (FAVR) reimbursement.
FAVR uses automated-mileage tracking, enabling employees to seamlessly capture their mileage and submit receipts. Companies can then provide them with a fair and accurate reimbursement for the business use of their personal vehicle. It’s a much better cost control option than spending thousands on purchasing or leasing vehicles, providing gas and maintaining them. It also provides IRS-compliant, tax-free reimbursements.
Coming back from the pandemic may be a steep hill to climb. In order to survive, small businesses need to get creative and find new ways to simultaneously grow and control costs. Expanding markets and exploring financing options are as important as retaining customers and providing for employees. So where should you start? Being able to trust outside organizations to help with the management of any portion of the business, and with a return on investment, may sound too good to be true. But that’s precisely what Motus can do for your vehicle program. Interested in learning more?
With Motus, accurately capturing business mileage has never been faster or easier.
Contact us today or take a virtual tour of the Motus Platform.
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