5 Hurdles Small Businesses Face in 2020
Obstacles and hurdles are nothing new to small business owners, and 2020 is making no exception. New technology, consumer behavior and financing trends are some of the factors constantly altering the landscape for businesses, which must adapt to survive. Here are 5 critical challenges you could potentially face as a small business in 2020 and how to prepare for them.
1. Qualifying for Financing
It was once easier to take out business loans, but lenders want businesses to meet higher qualifications than ever now. If your company has little or no history with creditors and lenders, you could have a hard time borrowing money to fuel your business. To get a Small Business Alliance (SBA) loan, your company needs an SBSS score of at least 140. Still, that doesn’t guarantee the loan. According to Federal Reserve data analyzed by Harvard Business School, 43 percent of small businesses applying for loans are denied. With this traditional route of funding losing reliability, some small business owners are turning to alternative financing options like crowdfunding, venture debt financing and business credit cards, which have a lower barrier to entry.
2. Scaling Without Losing Culture
Great startups are founded around a philosophy or spirit that identifies them. Unfortunately, not all businesses prioritize company culture when watching their numbers grow. The most successful companies scale without losing the essence that made the company special even with small numbers. Consumers today care about their experience with a brand and being able to identify with it. Creating a culture or “vibe” they can connect to is what makes the customer’s interaction with your brand come alive. It doesn’t happen by itself, but there are strategies for infusing company culture into everything your employees do.
It may seem like the more you define your culture, the more you exclude people. On the contrary, company culture is never about exclusivity. Establishing your identifying principles and beliefs as a company makes it easier for employees to understand and meet the customer’s needs. Internal processes like onboarding and collaboration among teams become streamlined because employees are on the same page. In turn, the customer experience is cohesive. Here are some ways you can promote your company’s culture as you scale:
• Ask about culture when interviewing candidates
• Identify traits that make up your company’s culture and look for these when hiring candidates
• Identify moments in company history that define its values, vision and mission and tell these stories in a humble tone
• Overcommunicate with remote employees, who are naturally more susceptible to losing touch with company culture
• Have bi-weekly one-on-ones to regularly check in (virtually, of course) with virtual workers
• Schedule weekly virtual meetups for teams using video conferencing software. Make time in each meeting to discuss a topic related to company values, mission, beliefs and other aspects of culture and how they can apply in their positions
• Have a position at your company dedicated to connections and relationships among employees,
• Go over company values, beliefs and mission with team members
3. Automating Business Processes
With all the technology companies can leverage today, those not automating business processes will have more difficulty competing in 2020 and the years to come. Automating routine administrative and sales processing tasks cuts labor costs while boosting productivity and accuracy. Companies also need to leverage marketing tools that reduce busywork for their employees, such as publishing blog posts and social media content. Even customer service tasks can be consolidated by chatbots and other tools that can screen questions and provide instant answers or service. Every company in 2020 should have a strategy for phasing automation into every aspect of business in which it can save costs and improve your customer experience.
4. Enabling Sales Without Skyrocketing Expenditure
Considering all the advanced marketing tools and services accessible to businesses, making sales isn’t the hard part–it’s paying for sales enablement. Keeping overhead low and sales numbers high is becoming a greater challenge entering the new decade. Driving bigger results is easy when you have a marketing budget like Coca-Cola’s. Growing sales on a smaller marketing budget is possible, but it takes creative talent and exceptional teamwork and oversight to get all the small tasks accomplished. Striking the best balance between investing in new technology and paying for great talent is a conundrum for most small businesses in this moment. One of the best ways some companies are confronting it is by outsourcing marketing tasks to creative freelancers, who cost a lot less than hiring in-house talent.
5. Keeping Data Safe
Businesses that haven’t completed their digital transformation by 2020 face growing data security threats. According to research from Verizon, cyber thieves now target 43 percent of their cyberattacks at small businesses, avoiding big-box companies harder to break into. Sadly, 60 percent of small businesses that experience data theft end up going out of business within six months.
Cybercriminals like to target on-premise servers with minimal or outdated security. Smart business owners are putting all their data on a cloud maintained and secured by a third party. If you lack the budget to put up firewalls, install antivirus software, a VPN and other technology required for the task, then the best solution is to outsource data storage and security. This way, a third-party takes care of all the I.T. work that goes into keeping your data protected and accessible at all times.
These Software as a Service (SaaS) and Platform as a Service (PaaS) solutions place each employee’s entire workflow all in one place. They can log into their “virtual office” on any device from anywhere in the world. Since data is stored and protected by a third-party service, you don’t have to worry about running backups, server downtime or scaling your I.T. equipment whenever you scale data.
Tackling Small Business Growth Challenges
There will always be challenges in business, but planning for the ones you can expect makes overcoming them a lot easier. Hopefully, this helps you understand what changes are affecting small businesses in 2020 so you can leverage the smartest strategies and avoid setbacks to your growth.