Before your SME or startup can leverage on opportunity, it must first identify and defend itself against the threats it faces. While every unique business will have a unique set of challenges and risks, there are some threats that transcend all industries. This is what we’ll pick at in this article…
Top 6 Threats & Challenges For Startup’s & SME’s
1. Missing The Pulse Of The Market. Your business exists because of your customer. One of the biggest challenges any small business will face is in keeping up with changing consumer trends. Smaller businesses often have less time and other resources available to tap into market research, and are often too sluggish to respond to changing needs. Startups risk missing the market altogether, offering a core product or service with no USP that is simply not in demand.
2. Ignoring The Digital Security Threat. Small business sites are often acute hacker targets. Often, a small business will use a standard WordPress site as the backbone of their content management system. Look, WP is great – in fact we’ve cooed about it relentlessly (most recently in our expose on Top DIY Site Tools) . However, its very success has made it attract hackers like moths to a flame. There are many plugins that can be used to bolster the security of WordPress. Ignoring increasingly malicious cyber threats can be a real problem for a business – especially one that does most of its trading online.
3. Not Diversifying Client Base. Some companies rely almost exclusively upon one or two key contracts. Big contracts are great – so long as they don’t have the run of your P/L. Having a larger number of smaller clients can help ensure a smoother inflow of revenues. If one fails, it does not threaten the very existence of the company. When an SME relies on one or a handful of key clients, losing one big contract can be utterly devastating!
4. Key Founder Refusing To Delegate Or Let Go. This can be especially apt when a small business has one talented control freak of an entrepreneur in charge. Successful delegation is key in the growth of a company. Leaders who cannot delegate successfully will find it hard to grow their business beyond a point.
5. Ignoring The Importance Of Being Client-Centric. Most SMEs rely on repeat customers to stay in business. After all, a small fortune is spent on marketing and promotion to lure the client through your company threshold. Once a lead becomes a client, this should be a powerful and lasting relationship. Psychologically, clients like to feel they have made the right choice with your business. Most of the hard work is already done. However, poor customer service or a shoddy end product/service will have your clients jumping ship as if you were the Titanic.
6. Missing The Warning Signs. The Titanic actually sank because it ploughed head first into a giant iceberg. Some business leaders do the same thing with their companies – they fail to understand warning signs when they come. Issues such as poor cashflow, patchy revenues or sapping leverage must be confronted and addressed quickly, before they take the business under.