Benazir Marjan is intended to use her business knowledge in the practical field through this article.
10 Particular Challenges for Small Enterprise
This is the 21st century, the age of commerce where business has been flourished widely spread all over the world. This time people have so many chances and opportunities to make money and establish themselves before the world. Hence, nothing comes really very easy. There are always obstacles, challenges and threats. If anybody wants to start a small business, that would be also very risky. But risk has to be taken as we know “If there is no risk, then no gain at all.”
I would like to describe 10 particular challenges that a small enterprise may face. These are:
1. Dependency issue: All businesses have link with clients, suppliers, middlemen (wholesalers, retailers, agents and brokers). The companies sometimes get dependent with all of them over time. They may have very good relationship between them. But in case of small business, they have connection with few clients, supplier and middlemen. Therefore, if any problem arises, like if the supplier fails to supply the raw material on time, the company may fall in danger. As they have few connections they will not able to fix with new party very soon. Consequently, there will be a disaster for the enterprise.
2. Manage customer: It is always very hard to attract customers for small companies. People always tend to run after large and well established ones. Even some customers come for it, but they have high tendency to switch to the substantial enterprises.
3. Cash flow issues: As we know, businesses always run with credits. Enterprises have strong link with the creditors. The issue is that creditors don’t want to give loan to small companies very easily. It is a great challenge for small companies to run its business. Creditors always feel uncertain about the ability of small enterprises to pay back the money on time.
4. Hiring talent: It is very usual that very highly qualified and experienced candidates always tend to run after very well renowned companies. In this regard, small companies have to recruit little less skilled employees for their organization.
5. Brand awareness: Brand awareness refers to people’s ability to recall and recognize any business. Small enterprises have little coverage in the market. That is why their brand awareness is less than the competitors. This is a vital challenge for any small company indeed.
6. Promotional activity: A company needs huge marketing and promotional activities to expand its overall growth. These kinds of scheme are really very expensive. It is very hard for small companies to afford these campaigns. Therefore, small enterprises always stay backward from market leaders.
7. Expensive technology: Using updated technology helps in increased production. Sometimes small companies cannot do it due to high expenses. In order to cut down cost, they avoid big-budgeted machinery. This is how it limits their production and all over growth.
8. Measuring performance: Most of the time small enterprises keep lacking in performance measurement properly. It is always very important to track relevant business metrics, key performance indicators, that display a measurable value and shows the progress of the business goals. Without proper performance measurement, small enterprises could not able to make desired headway.
9. Economy: Economy is always a great consideration for any kind of business. Entrepreneurs need to understand the economic situation before implementing any business idea in real. As we know, small businesses accelerate economic growth, by providing employment opportunities to people who may not be employable by larger corporations. But, when economic situation is bad, small enterprises suffer most. In fact, in most of the cases they got bankrupted. As they don’t possess very strong funding, worse economic condition may put them at zero level. For example, now-a-days we can see there are thousands of companies got bankrupted due to Covid 19 effect all over the world. This is a significant threat for small business anywhere in the world.
10. Government regulation: This is the world of business, but it is also true that small businesses are not welcomed in every countries. Governments discourage small enterprises in some countries due to their uncertainty and vulnerability. In fact, banks don’t want to give loan opportunities for this kind of businesses in several countries. This is another challenge for small business execution.
The above reasons may vary from country to country due to economic standard and life style differences.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 Benazir Marjan