Over the next 5 weeks I am going to talk about a range of challenges facing many small to medium businesses and we will also touch on what they can do about it. How they can plan a strategy to overcome it.
I will say at the start of this that I am also available to help anyone with these challenges and we can set up some time to focus on you and your business and see how I can help you.
This week I am going to look at your client base and some of the challenges I see that small businesses have.
The biggest aspect here is breadth of client base. When you start out how do you develop a broader base? Often small businesses become over dependent on one or two key customers. You may even be a sub-contractor and never interact with the main customer.
This can often mean you focus heavily on those dependencies and over sell and/or over service them. That may seem like an odd statement but, it happens, we bend over backwards for those who we need to do business with to survive. Maybe we share too much with them and the relationship becomes one we love but they can grow sceptical about. They want the small business to succeed especially if they like you, but they don’t want to be caught with no supply of your product or service if you over trade and start to have some simple cash flow issues.
So, what can you do about it, well it is all about managing the relationships you have and ensuring that you are disciplined around your time to maximise your approach whilst you are developing other income streams or customers.
- Find out from your customers what they need/want, then consider this before letting your customer(s) know what service they can expect, be honest, be positive and manage expectations.
- Ensure you have a plan for development of your offering – Look at your niche and do some research. Not the type you quickly did when asked to put together a Business Plan but more focussed and specific.
- Plan which customers you want to deal with – set yourself goals around knowledge of that customer, key people in their business, what product or services they use already. What products or services they need and how you can help them – so plan specific strategies for target customers that will meet their needs.
- Look at complimentary income streams and offerings, for example if you deliver fresh food could you offer frozen and if so, how? If you are a retail outlet, what can you offer that may bring in more customers?
- Time is critical – You may be on your own as a small business or have a small team. So, ensure they have time to focus on developing opportunities. Planning out everyone’s operating rhythm is so important especially when you are building and scaling your business
- Get support if needed – keep your offering up to date and fresh, your website, your social media up to date and relevant.
- In the instances where you are becoming unprofitable or have customers who don’t make you any money then you need to consider this and make a change. You could increase prices alternatively you could discuss with the customer and agree a mutual way forward. You may need to be decisive and make tough decisions here however learning fast and moving forward will put you in charge of your destiny.
The main point here is really about setting up your business to ensure you have a solid customer base that you can set great goals around, whilst developing further opportunities or deeper opportunities to diversify your customer base. This can also lead to considering Income streams, allocation of resources and working patterns for your team. One of the most valuable aspects to focus on as well is really effective financial management that enables all of the above.
So don’t forget if you have any of these challenges, or others, get in touch and lets talk.