According to research reported by the Small Business Administration, the number of small businesses in the U.S. has increased 49% since 1982, with over 28 million small businesses accounting for 54% of all of the country’s sales. Despite their significant impact on the national economy, many small businesses face an uphill battle when it comes to being able to effectively compete with larger, more established firms in several key areas. The following is a brief overview of the top three challenges that small businesses face that limit their ability to succeed.
Human Capital Management
As a small business begins to grow, its biggest challenge becomes how to properly manage the company’s human capital. In the early days when a small business first starts up, the owner may be the only employee. At this stage, when the company is comprised of a small handful of employees, it’s not really difficult to keep up with most human resources issues.
Over time, as sales revenues increase, the business grows to the point where the owner must increase the size of the workforce. As the size of the workforce grows, it quickly becomes quite tedious, time consuming and costly for owners and managers to track and keep up with common human resource issues, such as the amount and types of benefits offered, HIPPA rules and regulations, HSA balances, time and attendance and so forth.
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At this point in the company’s lifecycle, it really does become a necessity for small businesses to deploy human capital management systems, such as those offered by Asure Software. A fully integrated software system automatically tracks changes in human resources, including payroll and taxes, benefits, talent management and even time and attendance records. Using a software system to manage human resources, doesn’t just free up the time for owners, managers and other leaders to spend on more important tasks, it also reduces the chance of costly mistakes being made due to manual data entry errors.
By investing in software to take over these repetitive tasks, owners and others can get back to running the business and handling its day to day operations. An advantage over the competition occurs when leaders invest in and deploy such software, as doing so gives them more time to spend developing their strategic business plans and creating innovative new processes and products so that the company can remain profitable and continue to grow.
Attracting, Training and Retaining the Best and the Brightest
Small businesses sometimes struggle to attract top talent, which is critical to innovation and creating value for customers. Small businesses can still attract and recruit highly qualified, intelligent and creative individuals to become part of their team when they focus on the similarities between the company’s core values, mission, and culture and each candidate’s personal values and goals.
Focus negotiations on how becoming part of the team will help both the company and your prospect to become partners that share the same values and can work together to help one another reach their common goals.
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Retain your best employees by offering rewards and recognition for their work as well as providing greater autonomy and flexibility when it comes to the way that the works gets done. Offer opportunities for continued learning and development, via training and continuing education as well as formal coaching and mentorship programs.
Brand Recognition and Loyalty
Perhaps the single most difficult challenge that nearly all small businesses face is how to create a brand that stands out from similar competitors and builds loyalty. This is especially difficult in a crowded marketplace where larger, established firms have more cash to spend on marketing strategy.
To build brand recognition and loyalty, you must first figure out what it is that you do well, that offers value to your customers, and that is different than what anyone else is doing in your target market. Build your brand around these things.
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Invest the time and resources to discover everything that you can about your target customer and market. Discover who they are as people, their gender, age, location, and other demographics, as well as their tastes and preferences. Focus your marketing efforts, as well as new product development, on meeting their needs.
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Marshal your marketing efforts across multiple platforms networks: digital, social media and mobile to attract customer’s attention. Ensure that the messages you send build your brand’s authority and stimulate brand loyalty. Use tools such as local SEO, smart segmentation, and personalize your custom content to increase awareness about your brand within your target audience and increase the impact of your marketing efforts.
When competing with larger companies, small businesses can successfully overcome challenges and gain a competitive advantage when they focus on finding ways to compete with larger companies that turn their smaller size into an advantage rather than a disadvantage.