Small businesses are significant contributors to the Australian economy and will always remain so. The majority of small business formation is increasing every year. They not only make an important contribution to the Australian economy, but they also provide a large number of employment opportunities and add value. We cannot deny the fact that these small businesses and small start-ups have made a huge contribution to national prosperity, supporting Australian jobs, they account for about a third of local production and provide employment opportunity for the private sector by 60%. However, it is very challenging for small businesses to survive in such a competitive business market especially in Sydney.
According to the Australian Bureau of Statistics, more than 90% of businesses in Australia are small businesses. Though these small businesses have contributed a lot to the Australian economy, they have to go through a lot of difficulties and fight for survival. Everybody knows starting a business is hard, but, they don’t know exactly what kind of business challenges and difficulties they are going to face. To help you with your small business, we are here with this handy post that will aware you of small business challenges that you’ll have to overcome.
The challenges faced by small business in Sydney
Things are a little tougher for small businesses, especially start-up businesses in Sydney. Many small business entrepreneurs are found starting a business with great vision and determination. They are found taking on a startup project easily, but, the real deal starts there. They have no idea what sort of challenges they are going to face.
Starting a business is a challenging task, but maintaining it is the larger challenge that business owners have to face. There are tonnes of challenges that every business faces which makes it harder for them to survive. We will look at the 5 biggest challenges that small businesses are often found facing in Sydney.
Top 5 biggest challenges faced by small businesses
In today’s business market, it is hard for a business without a proper marketing plan and strategy to survive. Businesses of every size, are found investing big money for marketing. Marketing can be online and offline. Digital marketing has become the trend and highest demand skill in Australia today. Every business is online today and they are working hard to grow their business and gain customers trust and engagement. The challenge here is to launch a successful marketing campaign, which brings your business story to your potential customers, build your business brand, engage customers and grow the business. Many of the businesses claim that they know how to do this, but launching successful marketing campaigns requires real skill and experience. Not everyone can do that.
The main purpose of running a business is to get customers and benefit from them. More customers, more are the chances of doubling your business revenue and grow your business. Otherwise, without customers, you cannot even generate your revenue and your business will simply be just a good idea, nothing more than that. It is one of the biggest challenges to attract potential customers and turn them into your loyal customers. Customers, these days they are very confident and are looking for the best customer service. You should not only provide great products and services, but you should also think about offering a great customer service experience so that your potential customer chooses you over your competitors. Achieving this challenge needs an effective strategy and planning.
Managing cash flow is one of the major problems seen in all business types. Unlike large enterprises, which have more than enough company funds and are backed by other larger companies or very wealthy individuals, small businesses don’t have many funds. They don’t tend to have profit for at least a few months and in this situation, they should have proper planning for business finance. Once you start getting clients, make a proper cash flow projection to maintain your cash flow. You should take the challenge of finding the most effective ways to reduce business cost and increase business revenues. If you think you lack the skill of managing cash flow, then it is best to find someone else.
Hiring the right people
Skilled and highly trained employees are the most important asset of a business. They play a vital role in the smooth running of an organisation and for business growth. Having the right people working for you will not only help you achieve your business goal but, will enable your business to be something more than an idea. Be it small businesses or large enterprises, having the right employee can result in a long-term and sustainable success process, whereas, the opposite can lead to business failure. Right employees are the key to the reputation of your business. Not only do they determine the future of your business but, they are the main key to keeping your clients happy and representing your business culture. Hiring the right people is surely a challenging task.
One of the common business goals between business owners all over the world is to grow their business. Growing their business can be in terms of expanding their businesses or opening a new branch of their businesses and so on. Businesses are found struggling hard to grow. Business growth is surely good for a business; it represents the success of your business. But the problem seen in almost all businesses is that they are not sure about their business target. They don’t know what business target they want to reach and without a proper target, they will never know whether they reached their target or not. So, make sure to set your business target first and then work hard to reach that target.
Why do small businesses fail in Sydney?
According to the Australian Bureau of Statistics, more than 60% of small businesses in Sydney or in the entire Australia fail during the first three years of establishment. These three years are found to be the most important and critical year for small business owners as their business fate is decided within these initial three years.
There are several reasons for the survival rates of small businesses in Sydney being very poor. Many might claim it’s all because of the global economic crisis, but, it is not the exact reason. Many types of research and studies have been made to reveal the underlying factors why small businesses fail during their first 3 years and all of them show a lack of management skills being the main reason behind it.
Some of the main reasons behind the failure of small businesses in Sydney are:
Poor business planning
One of the key reasons that small businesses face failure is a lack of proper business planning. They simply startup with a bad business idea without proper long term planning. They have no clear strategy and business vision which is very important to achieve their business goal.
Too many small business owners fail to have enough funds to operate their business for the long term. Insufficiency in business capital has been one of the major factors that lead to business failure. Small business owners should calculate all the potential start-up operating costs beforehand.
Lack of experience
Though most of small business owners are entrepreneurs by nature, they might have enthusiasm about running their own business. That’s great, but what goes wrong here is they don’t have proper training and business experience which results in business failure.
Improper cash flow planning
Improper cash flow planning has not only been the leading reason for small business failure in Sydney, Australia but, all over the world. A sufficient financing and proper cash flow plan with a proper understanding of market conditions are what small business owners need to have.
Small business owners often make this blunder mistake by choosing the poor location for their business. They lack research and self-awareness of visibility and the number of business competitors in that location. Location near malls where people frequent most will work well for your business.
Ineffective sales and marketing plans
Most of the small business owners ignore the power of marketing and miss the great business opportunities. If you don’t have an idea of who your target audiences are and lack the proper marketing plans to reach them then, there’s no hope for success. You should alert your customers about your business. If your sales and marketing plans suck, then, it will take your business to nowhere.
Poor Budget management
No matter how well your business is doing, if you fail to manage and control your business budget, then, your business will end up hitting the ground. Losing control of the cash and budget has been the major pitfall for many small business owners in Sydney.
How to overcome these small business issues?
2016 has been a year of both opportunities and risks for businesses, especially for small businesses in Sydney. Small businesses have to face lots of risks in this modern business city Sydney, where competitions keep on going higher and higher every single day and the growing confidence level of consumers are not to be ignored.
Therefore, starting a business is really a scary idea and running a small business in Sydney is not an easy task. Almost all small business starters in Sydney have no idea what’s going wrong with their business and they lack proper tips to overcome those business issues. Besides risks and failures, there are lots of business opportunities in Sydney that a small business can have and take their business to the next level. To do that, they need proper business tips and a guide to success.
With this in mind, we have compiled a list of effective small business success tips for 2021.
If you want to make 2021 better for your business, then, plan ahead. From our own experience and research, we know that small business owners need a proper business plan to benefit. Writing down a long-term business plan not only helps business owners to stay focused and achieve their goals but, it also helps them to prioritise how to invest both their time and money. Review your business plan on a regular basis and refine your business strategy.
Investment on Right Resources
Many small business owners fail in accomplishing this part of their business. Business owners must do thorough research before investing in any resources, be it hiring an employee or technology or marketing. For any business, be it small or large enterprise, they need a proper marketing and business promotion, well-skilled employees right for the job and latest technology to move along with others in their business niche.
Manage cash flow
More than 22% of business owners point up the need to manage the cash flow of their business. To grow a healthy business, you need to have reduced expenses and increased revenues. Prepare a cash flow projection for your business which will help you find the potential cash pitfalls. And try to find the main source of your cash flow problems and look the ways that can help to reduce your expenses. Make sure that you receive your payments on time from customers.
Grow with caution
Most of the start-up businesses, they get too excited receiving lots of businesses and jump towards expanding their business. Growth in business is surely a good thing; it’s a sign of your business success. But, expanding a business too quickly can lead to a rise in problems regarding financial control. So, be cautious when it comes to quick growth or expanding your business.
Customer is the king: know what they want
Know what your customers want. There are numbers of small businesses in Sydney, trying their best to provide the best customer satisfaction. With too many available options, customers these days they want something new and unique. So, think about offering something unique that others don’t offer. The better the customer service, the higher the chance that your customer chooses you over your competitors.
Get a website for your business
All businesses, be it small or medium or large enterprises, most of them are online. They know very well that more than 90% of consumers search online before making actual purchase and how important a business website plays to find potential customers. Find a professional small business website design agency in Sydney that helps you design the perfect business website for you.
No marketing, no business
What’s the use of opening a business if your potential customers have no idea about you or are even unaware of your existence? Businesses, these days invest millions in marketing and advertising their business. With a proper marketing plan and strategy, you can not only promote your business to the world but, you can also attract your potential customers and convert them into your loyal customer. The better the marketing strategies, the higher is the business opportunities.
Competitors analysis: Never underestimate them
Never underestimate the capabilities of your business competitors. If you see your competitors doing well then, they must be doing something right that you have not been able to even think. So, take time and research your competitors thoroughly. This will not only help you to understand the market and your key competitors, but it will also help you identify your potential customers and their business strategies which you can implement in your business.
Ask for help
To succeed in business today, especially in Sydney you need to come up with good business planning and strategies. They need a proper consultation regarding tax and legal support, as well as proper marketing guidance. Therefore, think about getting advice from well-experienced business strategist and consultant regarding your business plans, marketing and promotions whereas, visiting attorneys and finding out about tax and legal queries can be a great help.
Are you ready to take your small business to the next level?
Now that you know the top challenges a small business faces in Sydney and the tips to overcome those challenges, it’s time for you to take your small business to the next level. If you follow any of the above-mentioned tips then, you are more likely to encounter positive results and yes, soon.
What are the challenges that you faced while starting your small business? Let us know in the comment box below.