What are the lurking challenges in business development faced by small businesses? How do overcome such challenges?
You may be a small business owner, or an executive dealing with developing the small business of your firm. Or you may be someone just curious to know how small businesses have to deal with growth problems. Then, this is for you.
First, understand why business development for small and start-up businesses can be difficult and challenging. What lurking challenges you can face in developing your business? Familiarise yourself with what business development is all about to deal with such challenges,.
What is a small business anyway?
A start-up is a small business. It remains a small business until it grows into a large business. It may take some time to grow, maybe some years, maybe a very much longer period. Or maybe it remains as a small business as ever.
Such small businesses can be manufacturing companies and service companies. Manufacturing companies can be for consumer goods, durable goods, ancillary parts supplies, crafts, and all other such small manufacturing companies not described here.
Services companies can be for distribution, dealerships, consultancies, software developers, accounting firms, law firms, retailers, wholesalers, any trade suppliers, laboratories, gymnasiums, any kind of retailing shops, and all those service providers not described here.
According to Wikipedia, “Small businesses are corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation.
What does business development mean to small companies?
There are some universal problems faced by all small business, and some problems specific to each business.
The universal problem for these companies is cash rotation, and enough financial capabilities to run business smoothly without hiccups. Another problem is finding enough customers to sustain their business’ survival. In between, there can be many other problems that perhaps small businesses do not take into cognizance of. These can be human resources, maintaining cordial and satisfying relationships with not only them, even with the customers.
Building relationships with those who matter most for their business survival and eventually its growth is vital. More than anything else, building relationships is a part of business development. This aspect is vitally important to small businesses. Both their survival and growth depend on their relationship building abilities with their audience. They can be customers, employees, suppliers, dealers, financiers, and other audiences who matter most to their business.
Business development means many things
Business development means many things to people. They perceive it with their business experience. For some, it may be strategies for how to increase sales or may market as a whole.
In a previous article, a broader perspective of what business development is all about is given. Business development is the collection of ideas and activities aimed at improving the performance of a company. Increasing revenue, expanding the business, increasing profitability through strategic partnerships and making strategic business decisions are just a few examples.
It is also all about building relationships to improve your business. It is all about your customers and the relationship you build with them. Not only that, tacitly your relationship with internal and external audiences also influences your business development. They’re all crucial to your company’s success.
When you are starting a new business or a growth plan, nothing says how it should be. No set rules on how it should not be because it’s your creation.
However, in business, what is created quickly becomes the standard method to follow. So that whenever you try to make a change, someone always resists it. But do not forget that since you created it, you can reshape it. Reshaping, if need be, is business success.
Reshaping or restructuring or whatever name you call it, find new ways to market your business, and how to grow by reducing sales and financial cycles.
Business development is primarily for growth
Business development is primarily for growth, and that is achieved by getting new customers. At the same time, do not neglect the existing customers because your growth lies with them as well. Getting new customers by losing existing customers makes no sense. You need both to sustain your growth.
Take business development as a serious skill to master. Do not neglect it and become panicked when you run out of business and again look for new initiatives. It is a doomed strategy as again creating a new business takes time and you will face the same problems as you face now. Instead, look to generate revenues in the next quarter or two, lest your cash flow stresses your business and employees.
Business development includes sales
A sale is the end function of marketing in business development. That is the key function without which there is no meaning of any development. Rather, no growth is possible for any organisation. One is to satisfy the existing customers to maintain statuesque in revenue, and the second is to get new customers to grow. Whatever developmental activities that take place ultimately lead to this vital activity.
To generate a sustainable business is the ultimate function of any development. Apart from sales, it includes all most all business functions put together that generate development. There are several functions such as finance, accounts, human relations, manufacturing, production, distribution, marketing, sales, etc. Business development covers coordinating activities of these functions by strategising and planning to improve each function for ultimate growth.
Entering new markets, expanding distribution work, adding new product lines, increasing production capacities, partnership programs, finding new marketing ways and sales strategies and customer management, etc. include in development activities.
Information is the key to development
Of course, you need feedback on your activities to strategise your growth or restructuring options. This is where market feedback, customer management, and opinions of your audience, both internal and external, matter.
Get information on what the marketplace demands. One geographical marketplace may have different demands from another. So it is important to know as practices differ from market to market. Study about competition and your position vice-a-vice them to know your strengths and weakness or drawbacks in your offerings. All this information helps in strategising your plans and actions for growth.
Customer management for growth
No customers mean no business, and no growth. Focus on offering what the customer wants to buy, not what you want to offer. Tweak your offering to suit customer needs, not the other way round. That will doom your business.
So, before attempting developmental activities, think from the customers’ point of view. This will help you reshape your business to grow.
How can you manage your development as a small business?
How can you manage your development as a small business? It is difficult for any small business to concentrate on growth strategies, as their immediate need is to survive in the business. All that we talked about above makes little sense to them right now. Their basic problem is cash turnover, and managing finances for the business. Their major chunk of time is spent on solving this problem.
In a small business, the owner, or a manager if any, have to manage all activities like data entry, interaction with customers, financiers, rotating funds, etc. Each one of these is a major activity, and it needs enough human resources to deal with each activity. Not only that, the manpower must be competent enough to deal with their respective assigned issues, otherwise, things will boomerang.
Small businesses cannot afford an efficient and enough work forces initially. That is why whoever is in charge has to take care of every related business activity. This situation can be reversed in large companies because they can afford resources on staff, marketing, and so on.
But as a small company, you need not worry about what you cannot afford right away. However, prioritise your plans, your actions, and your time.
Identify essential and non-essential activities. Assign those essential activities to yourself as the owner when you cannot assign them to anyone at that point in time. Then assign other activities such as data entry to whomever staff you have.
Monitor every activity
Make it a point to monitor every activity on a daily basis, including data entry, to keep you updated. Interact with every member of your staff to boost their performance. This way, you will have firsthand information on where you need improvements. This is only the beginning. Spend time with your customers as much as possible to update you with market changes, changes in their needs, and maintain customer experience.
This way you can prioritise where and on which aspect of the business to concentrate. Plan for your survival needs first, such as cash flow, then plan for improving your sales and getting new customers gradually. This way, you can sustain your business for long. Put efforts to succeed in business. You cannot just depend on your luck.
It is most important to keep your customers and suppliers happy with their demands. Major hiccup problems arise with allowing credit. So, be careful with this tricky issue. To get customers initially, you may have no option but to agree to credit sales. Be inventive in this aspect. Nobody is competent to advise you whether or not to agree to a credit sale. Another credit issue is for how long and how much. You are the only decision maker. Your survival depends on how you could manage this issue.
Losing customers is a big issue for small businesses, either of credit issues, or on quality issues, or not nurturing their relationships. Maybe a customer may stop his purchase for other issues which are not in your control. There can be many such risky situations worrisome for small businesses. So they cannot concentrate on any development other than survival and revival.
Here, your introspection is important. Jot down the issues that stress your business. Do this exercise as frequently as possible. It makes easy for you to find solutions to sort tricky issues. Be confident of your capabilities having started the business. You can find solutions eventually.