No one ever said that starting, running and growing a small business was easy. Most entrepreneurs know they’ve got their work cut out for them when they start up, but many are unprepared for just how difficult it can be until they get there.
Platforms like VENTUREAPP, a marketplace for businesses to submit requests for help from experts and solution providers, have firsthand insights into the struggles small businesses and startups experience on a real-time basis.
“Taking a look at the request data from the last half of 2015, it’s clear that there are a whole lot of challenges,” said Chase Garbarino, CEO and co-founder of VENTUREAPP. “It’s a competitive landscape on many fronts — gaining talent, awareness and sales are all constant goals to remain [relevant].”
Based on VENTUREAPP’s data and input from business leaders, here are the top challenges businesses will face in the year ahead, and how they can overcome them.
Marketing for small businesses can be a big challenge, especially when you’re trying to build a brand presence. Linda Lauren, a psychic medium and owner of the retail shop Embracing the Universe, believes she will have to work hard to market her changing brand in 2016.
If you’re planning to use newsletters in your marketing strategy, pay attention to how they perform and adjust your strategy accordingly, Garbarino said. If weekly newsletters are yielding no results, make them less frequent and use that time to focus on media outreach within your industry or social media marketing.
“You can’t just run marketing programs — you have to watch them and analyze the results,” Garbarino said. “If after a few months you aren’t seeing much engagement, awareness or leads, consider changing it up. The learning resources for small business marketers are endless and improving constantly.”
As your business flourishes, you’ll likely want to expand your team. “Solopreneurs” and partnerships whose small ventures are really taking off, like Nicole Bandklayder of NB Talent Services, say their biggest challenge in the year ahead will be handling that growth and hiring the necessary staff to manage the increased workload.
But it may be more difficult than businesses think: Over the last several years, the job market has been favoring candidates, and that’s not about to change in 2016. Businesses can no longer post a job opening and expect a flood of high-quality applicants. Instead, companies in many industries must put as much effort into hunting for talent as candidates do hunting for jobs.
“[Most] professionals have … some sort of digital résumé or profile, and there are plenty of places to prospect from online, depending on your industry,” Garbarino said.
Before businesses even begin the hiring process, Garbarino said they need to put hard work into their “employment brand,” which highlights the existing culture and what prospects can expect when they come to work for a company. He also recommended creating a unique interview process to give you a better idea of a candidate’s true abilities and fit.
“Make your interview process more closely mirror what the applicant will actually be doing at your company, and immerse them in the team they will be a part of, so both sides can get a sense of whether they are a fit,” Garbarino said.
Employee perks and benefits can play an important role in overcoming the hiring challenges listed above, but meeting job seekers’ workplace expectations can be difficult when you’re on a small business budget. Garbarino said it’s important to create scales of coverage that your business can account for at different stages of growth.
“You might not be able to cover full health in your first year, but is that something you can add on in year two or three?” he said. “From there, you can begin to create an expansion plan of perks and benefits that will engage employees as part of a larger, stronger culture.”
If money is tight, Garbarino advised considering cost-conscious options like work from home options, making your office dog-friendly on certain days, weekly learning sessions, etc. This is a great way to involve your team, too.
“Poll them to see what perks they would like to see, and then you can be certain they are pleased with your decisions,” Garbarino said.
Business financing is and always will be a challenge for smaller ventures. Whether you’re securing a loan, raising capital or saving up to bootstrap, the path to funding your business is often filled with hard work and the occasional speed bump.
Entrepreneurs who want to apply for a loan in 2016 may be especially concerned with the Federal Reserve interest rate, which was recently increased for the first time in seven years. Businesses are worried that higher interest on loans will negatively impact their financing options, Garbarino said. However, Forbes contributor Amy Feldman wrote in an article that the increase is expected to be “slow and easy,” and any impact on business borrowing costs should be minimal at first. Feldman also noted that federal policy is only one factor in loan rates.
“Whether banks truly return to small-business lending, how lenders are able to use technology to improve their underwriting, and whether the economy is on better footing will all be factors going forward,” she wrote. In the meantime, if you’re looking to start a business or get financing now, there are other things to worry about than the Fed’s decision.”
Garbarino added that locating and connecting with top lenders and financial experts via your own research, your professional network or services like VENTUREAPP can help you find the best rates and loan terms for your business.
Although larger publishers and advertisers have much more to lose from the recent trend toward online ad blocking, small businesses aren’t immune from its effects. Todd McGee, CEO of CataBoom, a platform for launching behavioral marketing campaigns, noted that the ads purchased by smaller companies may not get served to the audiences they’re trying to reach.
“Small businesses are often hindered by monetary constraints,” McGee said. “[They] don’t have the same big budgets as national brands to circumvent software, so they have to look for alternative ways to reach their audiences.”
Although focusing on unpaid advertising like social media engagement and word-of-mouth referrals can help, your business may still want to invest in some paid advertising. In this case, McGee recommended looking into cross-promotional partnerships and native advertising solutions.
“Native advertising makes the ad appear to be a natural part of the site on which it’s served, so it’s much more difficult for software to sense and block it,” McGee said.
Pete Borum, CEO of Reelio, a company that connects brands with YouTube influencers, noted that because of the agility of many small businesses, they are often faster to adopt new tactics, so it will be easier for them to avoid the more serious negative impact of ad blocking.
“There are hundreds of startups working diligently on new and better ways to reach consumers in an ad-blocked world,” Borum said. “Small businesses will be among the first to try and to master these new approaches as they come onto the market, just as they have been the first to adopt branded content and influencer marketing.”
Succeeding in 2016
Garbarino’s best advice to small businesses for the upcoming year is to expand their networks and learn from those that have been through this before.
“There are so many other experienced entrepreneurs out there who have already gone through similar challenges, or are going through them right now and are willing to share the lessons they’ve learned so far,” he said. “The ability to solve challenges directly revolves around the people you know and the connections you make.”
Finally, don’t be afraid to take risks and take advantage of your position as a small, nimble company to help your business get ahead.
“Small businesses still have a very steep, uphill climb to grow and thrive in a hyper-competitive world, but when the rules of the game change dramatically … they have a rare opportunity to become more knowledgeable and better equipped than the major incumbents,” Borum said. “Small businesses should … commit to testing many approaches and to failing quickly. And they should take advantage in the wealth of knowledge out there to become better storytellers … than the brands who came before them.”