If the past two years have taught us anything, it’s that our “normal” day-to-day can change at any moment. From mandatory restrictions to changes in consumer behavior, the overarching trend business owners have had to accept this year has been adaptability. No matter what stage your business is in, the rapid transformation influenced by constant change presents numerous opportunities for your organization to become a leader in the marketplace.
As we prepare for the coming year, it is essential for businesses to review the most common business challenges and, most importantly, strategize routes to overcome them effectively should they arise. The reasoning is simple: the business owner who understands the common problems businesses face and how to solve them is far more likely to tackle them head-on and succeed.
To help your business position itself for success, we identified the top three problems businesses face according to Small Business Trends Alliance (SBTA) and what your business can do to solve them.
Business Problem Number 1: Managing Capital and Cash Flow
Starting off our list is the most critical for business owners to understand: managing capital and cash flow. More times than not, the issue may very well be a lack of capital and cash flow rather than management difficulties. But, no matter the business, a steady cash flow and access to capital is the key to survival and longevity.
A large part of maintaining good cash flow is having a steady influx of customers. The problem, however, is that according to a customer acquisition cost survey, the cost of obtaining new customers has increased by almost 60% over the past six years. In addition, as technology makes it easier for companies to establish themselves overnight, many markets are becoming highly saturated, making it difficult for businesses to set themselves apart.
Solution: If you’re struggling with maintaining cash flow, your best bet is to increase your business operations by bringing in more customers in 2022. As a business, you should already understand who your ideal customers are, what they enjoy, and how your company solves any of the problems they are looking to solve. If not, start there.
By understanding all factors of your ideal customer, your business can create a buyer persona, making it easier to craft ideas and promotions that your customers will gravitate towards. When consumers think of the products or supplies that your business provides, your goal is to have them think of your business first. Developing a robust online presence, increasing marketing budgets, and advertising will help your company improve its cash flow through greater customer acquisition.
Business Problem Number 2: Hiring-Then Retaining-Employees
According to the U.S Bureau of Labor Statistics, some 4.4 million Americans quit their jobs in September 2021. Though there have been mass resignations and shifts in the job market before, what we are currently experiencing is unique on its own. Researchers are still trying to figure out the core reasoning behind this phenomenon, but many points towards the pandemic causing employees to reevaluate how they view their lives and employment. Regardless of which side you stand on, you must factor in how this is affecting or could affect your business’s talent pool.
If this isn’t causing concern enough, it’s important to remember that hiring new employees can be costly. According to Glassdoor, on average, it can cause businesses some $4,000 to search, engage, and onboard a new employee. Though this number will vary from company to company, having a high turnover and repetitively onboarding new talent will surely be an expensive expense no matter how large of a budget you have.
Solution: It’s effortless to hire with a short-term mindset. But to ensure your business builds a team of employees that will help your company achieve its goals in 2022, you’ll need to invest time into your hiring process. Any job posting will receive applicants, but not all of those applicants will have what it takes to take your company to the next level.
If you experience high turnover, consider conducting exit interviews to determine what is causing your employees to leave. This will require immense self-reflection of your business as a whole, but it will ultimately position your company to improve any aspects that may be deterring top candidates. Employees want to feel that what they are doing makes a difference and that their employers genuinely care about their lives (both personal and professional).
To improve retention, you’ll need to either offer competitive compensation or have a workplace culture that stands out from the rest. Almost every employee has some type of experience with a bad company, so take the time to make your workplace special. Exerting the time to build professional development, initiating appreciation strategies, and taking time to know your employees will help increase loyalty and retention.
Business Problem Number 3: Administrative Operations
Having all the customers in the world and talented employees won’t do your business any good if you lack the proper procedures in place. For example, failing to establish the best bookkeeping, payment, and billing systems will cause your employees to spend unnecessary amounts of time fixing errors.
Time spent fixing errors and updating mistakes is time not spent acquiring more customers and increasing sales. Therefore, your business needs to ensure that your employees have the required technology and systems to do their job as efficiently as possible to rise above the rest. There really isn’t any excuse not to have processes in place to automate tedious tasks such as billing and file management in this digital age.
Solution: Consider applying a digital-first mindset when updating your current business practices for 2022. For example, payment processing and invoice software can help minimize the time required to collect customer payments. Additionally, most payment software helps automate all aspects of the payment process, such as invoice mailing and payment reminders.
Not only will digital solutions benefit your business, but your customers will benefit too. If you’re unsure where to start, consider utilizing a tool like Denefits.
Denefits is an innovative payment system that provides businesses across the country with simple payment solutions and flexible payment plans for their customers. Utilizing Denefits, companies can offer payment plans to customers with instant approvals and without any credit checks. By helping you deliver your products and services to more individuals, Denefits helps you take charge and increase your monthly revenue. Denefits will even act as your billing department by automating the collection process for you.
With the new year rapidly approaching, your business needs to consider utilizing the various changes we are experiencing to its advantage. Though often scary, change can be a rewarding experience, especially when it doesn’t catch you by surprise. For 2022, we believe effectively managing cash flow, maintaining solid teams, and automating systems in place will be detrimental to your success.