Growing pains: common difficulties faced by SMEs and how to overcome them

| October 25, 2013

Being a small or medium enterprise (SME) is never easy, as you often have lots of problems larger firms do not have to face.

As such, here are five common ‘growing pains’ commonly faced by SMEs ? whether they’re looking to expand or just stay afloat.

Accounting

Accounting is crucial in any business but, when you’re smaller in size, it’s expensive. Good accountants do not come cheaply and, as a boss, you don’t always have the time to do it yourself.

Even then there is the risk of human error, which can spell disaster if it?s bad enough. To resolve all of these issues, online small business accounting services can offer automated, remote accounting, taking the time off of your hands and removing the need for a full-time or hired accountant.

Underselling

Some may call this a dirty tactic, but it happens nonetheless. As an SME, there’s a minimum to how low you can sell something whilst still keeping even or making a profit. Big companies can sell at a loss if they need to dominate the market, ensuring returns through a long lasting, larger customer base.

A potential way around this is to branch out. Rather than trying to compete in underselling, offer reasonable rates with additional services of features. There are many factors that draw a customer?s attention, not just the price.

Funding

Similarly it can be hard to fund yourself when you’re small. SMEs often make smaller profits, which amounts to less money in the bank. If you want to expand, the company will need more lucrative resources.

This has many solutions. You could take out business loans from banks or building societies in a very competitive market worth taking advantage of. You could also drive stock, push sales or make cut backs to open up more profits.

Skills

It has often been reported that SMEs lack a high amount of skills relative to their business. This is especially true in a skills shortage, where bigger firms dominate the market and attract the best staff.

There are many ways to work around this. Companies could use apprenticeships, offer better training than others, or other schemes that show commitment and loyalty. Rather than looking for already skilled workers, look for someone just starting and train them up. This may prove cheaper and pulls the best of the next generation out in advance.

Customer Audience

Whether you’re just starting out or happen to be a small company, it can be difficult to get a growing customer base. This is because you’re small name is competing in a big market, so you need to shout a little louder.

In other words, look for marketing and promotional efforts to draw attention to you. Sitting on the internet or high-street hoping people will stop by isn’t going to work. Don’t rely on window shopping, get out there and send the right message. With online methods such as social media, it has never been easier.

Growing pains

Category: Business

About the Author ()

Comments are closed.