What Can Be Learned from Struggling Smaller Businesses to Increase Your Business Performance?
When looking at small businesses in the UK, many never grow beyond being a one-person operation. The tendency to want to do everything on their own is often the undoing of entrepreneurs who get stuck in the mode of “I have to do everything myself”. Unfortunately, this leads to difficulties down the road because trying to juggle too many balls in the air at once or to be an expert at all tasks isn’t going to be met with success.
The good news is that it’s possible to consider the challenges facing small businesses and what they tend to do wrong, to get some useful takeaways on how to run your business differently.
Lack of Organisation is Costly
Staying organised both in the business operations and the finances makes a huge difference. Struggling small businesses tend to be far less organised with out-of-date cashflow forecasts and a greater number of inaccuracies. They often require a short-term business loan to get them out of trouble when their forecasts don’t meet reality, even if their total sales numbers turn out to be correct.
Tip: Staying organised allows more client work to be completed. Focus on creating a solid structure to business operations for better results.
Trying to Do Your Own Business Taxes Leads to Complications
To save money, small business owners often resort to doing their own VAT, payroll, and company taxes. Usually their personal taxes, too. This despite the fact that they’re not accountants (in most cases) and have never prepared these documents before. If they’re also disorganized in the way they run their business and personal lives (see the previous point), returns are filed late, and they lose money paying late penalties and interest too. For some businesses, a loan to pay VAT or taxes is needed to cover the shortfall, unless sales catch up.
Tip: Manage finances better by outsourcing the accounting role to a home-based accountant with reasonable fees. What you will pay in accounting costs is likely saved by greater efficiency in getting returns filed on time.
Marketing & Customer Acquisition Is a Key Pain Point
One of the consistent things found with struggling businesses in the UK is that they don’t have effective marketing plans. Rather than using a freelancer to produce effective marketing materials, they try to do it themselves, leading to unprofessional results. The reality is that without a marketing team, small businesses often lack the experience to know how to market their products or services. Without effective multi-layered approaches to marketing, a business cannot grow fast enough to succeed long-term.
Tip: SME’s should be using social media for free marketing, paid advertising to target their likely customers directly, and print advertising or local event sponsorship for local-based businesses. Developing a core brand image to project across these marketing channels is also important. It could be outsourced to a UK web design team with the requisite skill-set to create a brand that will be attractive to UK businesses/consumers.
Starting a small business in the UK is the easy part; it’s after the initial first steps that the challenge really begins. Small businesses must be hyper-efficient with their time and use of resources to get the most out of every work day. They also must be willing to outsource cheaply to third-parties to buy-in skill-sets that they don’t possess in areas like accounting and marketing.