It’s no secret that setting up a small business and overcoming the hurdles it takes to turn an idea into reality comes with challenges. Knowing how to identify potential obstacles before you come across them, and even better, knowing the best way to overcome them when you do is important to the success of your business.
At BOQ we work closely with our customers, so we understand the challenges that small businesses in Australia face every day. From finding customers to hiring the best people, understanding how to get business funding and planning for business growth, there’s always something to deal with.
Our small business banking experts at BOQ share their advice on how to deal with three of the most common problems small business owners face.
Losing customers to your competitors
There’s truth in the adage that ‘imitation is the greatest form of flattery’, but unfortunately when it comes to small business no idea is completely safe. This is why you will probably have competitors selling a similar product or service to yours. And while you think you may have a loyal customer base, if your competitors start selling the same service for a lower price, or worse still create something better, you may find your customers running into the arms of your competition.
So, how do you stop this from happening?
Understand your customers and their needs
Undertake market research to help you get a better understanding of your target customer and what they want from your product or service. If results show you’re not meeting expectations, it may be time for a change - and fast.
Get to know your competitors
It’s important to stay on top of what your competitors are doing so you can implement what they aren’t doing into your business plan and marketing strategy. This could be a simple as including a discounted shipping rate, creating a business rewards scheme or setting up an online business to find new customers.
Identify your competitive advantage
Seeking out ways to set your set your business apart from the competition through responsive pricing or product specification can be the difference between success or significant challenges in the long-term. Finding ways to achieve economies of scale can create price advantages and cost efficiencies across your distribution network. Of course, this is often easier said than done so make sure you stay agile enough to respond to technological innovations and other industry changes that may impact your business.
Hiring and retaining the right staff
Your small business is only as good as its employees. After all, they’re at the ‘coal face’ every day dealing with customers and delivering the products and services that you rely on. That’s why no matter what stage your small business is at (whether you are a start-up business or looking for ways to grow an established business), learning how to hire and retain the right staff is important. Unfortunately, this can often be harder than it seems.
According to the HR Industry Benchmark Survey 2019 published by ELMO in partnership with the Australian HR Institute (AHRI)1, the average staff turnover rate for SME businesses was 16% and high employee turnover was cited as one of the top challenges for 1 in 6 respondents. Furthermore, the Australian Bureau of Statistics (ABS) reported that 59 per cent of businesses reported staff shortages as a significant impact of the COVID-19 pandemic2.
High staff turnover can also be costly. As an article published by the Australian HR Institute3 highlighted, the cost of ten staff resigning from an SME business with roughly 40 staff at an average salary of $70,000 on board would be around $200,000. So it pays to recruit well and do what it takes to keep good people.
When it comes to hiring new staff, it’s important to look out for the following qualities regardless of the role:
- Personality: Do you think the person will fit into your existing team and business culture? Do they have a positive, can-do attitude and strong communication skills?
- Flexibility: Is this candidate willing to pick up new skills and adapt their duties if and when they need to? Are they comfortable with unknown elements of the role?
- Skills: Does this person possess the skills needed to complete the role without significant training? Do their career passions match the role?
- Growth potential: Does the candidate’s skill set add value in other areas of the business that support your business growth goals?
Answering these questions will help ensure you find the right hire for your business. But how do you make sure they stick around? Here’s a couple of tips:
Training and development programs
Implement individual progression programs for each employee to show that you are invested in their career and committed to giving them the chance for advancement.
Flexible work arrangements
The last thing you want is burnt out employees. So, providing a great work-life balance is also important. Implement flexible working from home (WFH) arrangements where possible, take family commitments (such as day care and school drop offs) into consideration, and respect the efforts made by individuals – for example, if they have worked overtime offer them a later arrival or earlier departure time to compensate.
Accessing business funding for your small business
For many SMEs, business growth is a focus of their business plan. However, in order to grow, many small businesses need access to business loans or support for small business such as government grants or stimulus packages to expand their ventures. Unfortunately, many SME business owners tend to think a small business loan is out of reach due to the perception of high business loan interest rates and a perceived inability to make repayments.
Rest-assured, this isn’t the case and BOQ is here to help with a suite of business banking solutions for your small business - ranging from business transaction and savings accounts to business credit cards, bank loans and other business lending products including a business line of credit.
Contact us to find out more about how BOQ Business can support your small business