HOW TO ADDRESS 15 MAJOR CHALLENGES FOR SMALL BUSINESSES
1. LIMITED BUDGET
Small businesses often work with limited budgets, making it tough to compete with larger companies that have more financial resources. This can result in missed opportunities and slower growth.
However, a small budget doesn’t mean you can’t market effectively. It simply requires being more strategic with your spending and leveraging free ways to reach your marketing goals.
MAXIMIZING YOUR MARKETING BUDGET: STRATEGIES FOR SMALL BUSINESSES
Start by prioritizing low-cost, high-impact marketing strategies. For example, social media platforms provide a free way to reach a wide audience. Building a following and engaging with your audience boosts brand awareness while driving traffic to your website.
Content marketing, such as blogging and using SEO techniques, can also generate organic traffic with minimal investment. Affordable digital marketing tools can additionally help streamline your efforts, saving both time and money.
For instance, tools like Semrush Social allow you to easily schedule posts across major platforms like Facebook, Instagram, and LinkedIn. If you’re focused on content, Semrush’s SEO tools can guide your strategy with data-driven insights. The Keyword Magic Tool, for example, offers keyword ideas and valuable metrics like difficulty and search volume.
Explore these tools with a Semrush free trial to enhance your marketing efforts.
2. LACK OF A MARKETING PLAN
CREATING AN EFFECTIVE MARKETING PLAN FOR SMALL BUSINESSES
- Goals and KPIs: Define your marketing goals and how you’ll measure progress.
- Target Audience Overview: Identify your audience's demographics, socioeconomics, and behaviors (see the next section for how to gather this information).
- Competitor Analysis: Analyze your key competitors and their successful marketing strategies.
- SWOT Analysis: Evaluate your business’s strengths, weaknesses, opportunities, and threats.
- Marketing Channels, Strategies, and Tactics: Outline the platforms and methods you'll use to execute your campaigns (refer to this section for guidance on where to focus).
3. FINDING YOUR TARGET AUDIENCE
HOW TO DEFINE YOUR SMALL BUSINESS’S TARGET AUDIENCE
A great way to identify your target audience is to analyze the audiences of your competitors, as they likely overlap with your potential customers.
To start, use One2Target by entering up to five competitor domains and clicking “Analyze.”
On the “Demographics” tab, you’ll find data on your competitors’ audience age, gender, and geographic distribution, along with information on unique visitors to their sites.
The “Socioeconomics” tab provides details such as household size, employment status, income, and education levels.
Leverage these insights to refine your marketing strategy. For example, if you find that your competitors’ audiences are mostly 25-34 years old and employed full-time, you can tailor your advertising campaigns to this demographic.
This targeted approach helps you optimize your marketing budget by focusing on individuals more likely to be interested in your products or services.
4. PROCURING CUSTOMERS
This challenge isn’t unique to small businesses. Even major brands like Apple, Toyota, and McDonald’s don’t just wait for leads to come in—these industry giants have dedicated teams working tirelessly to attract new customers.
For small businesses, the challenge is even more pronounced. How do you find customers when you’re not a household name? With so many acquisition channels available, it can be difficult to determine where to focus your efforts.
Moreover, acquisition costs are rising sharply, having increased by nearly 60% over the past six years. Small businesses often lack the financial resources of larger, established companies. If you’re struggling with this issue, you’re not alone—49% of companies identify customer acquisition as their top marketing goal.
HOW TO FIND THE RIGHT CUSTOMERS FOR YOUR BUSINESS
Finding customers starts with defining who your ideal customer is. Even with the best ideas, a scattershot approach won’t work—it’s crucial to target the right audience.
Develop detailed buyer personas to understand what your target customers look like, their activities, and where they spend their time online. Our free guide offers customizable templates to help you create accurate representations of your ideal customers.
Using these detailed personas can significantly enhance your business outcomes. Once you’ve defined your personas, you can create content tailored to your target demographic and distribute it through the channels they frequent, with messages that resonate with them.
5. KEEPING CUSTOMERS HAPPY
- Delightful service experiences encourage customers to make additional purchases and foster repeat business, leading to higher spending.
- Satisfied customers are more likely to spread the word about your business, providing valuable word-of-mouth marketing at no extra cost.
- Retaining a happy customer is more cost-effective than acquiring a new one.
However, as a small business, delivering this level of delight can be challenging. Limited staff or resources might hinder your ability to address customer issues effectively or implement enjoyable programs like loyalty rewards.
To truly delight your customers and turn them into brand advocates, aim to exceed their expectations and deliver exceptional experiences.
HOW TO ENSURE YOUR CUSTOMERS REMAIN HAPPY
- Understand Customer Motivations: Know why customers choose your business and what they need from you.
- Set Clear Expectations: Define what customers can expect at the beginning of your engagement.
- Meet and Exceed Expectations: Deliver on your promises and address customers' needs effectively.
- Add Unexpected Extras: Innovate ways to provide added value that surprises and delights.
- Measure and Improve: Continuously assess customer satisfaction and refine their experience.
6. INCREASING BRAND AWARENESS
If your customers don’t know who you are, they’re unlikely to buy from you. Research shows that 70% of brand managers believe building an audience is more valuable than direct sales.
Consequently, marketers in 2021 identified brand awareness as their primary goal for marketing campaigns.
The reason for this focus is clear: building brand awareness fosters trust, helps customers connect your brand with your products and services, and ultimately drives sales while cultivating a loyal customer base.
As a small brand, it might seem like the biggest names suddenly appeared overnight. How did they achieve such rapid growth? Can your business experience similar success?
While many of these companies’ successes were built on behind-the-scenes hard work, failures, and rejections, there are effective strategies you can implement now to enhance your brand’s visibility and reputation.
HOW TO INCREASE BRAND AWARENESS FOR A SMALL BUSINESS
There are various strategies for spreading brand awareness, but here are three key methods to consider: PR, co-marketing, and blogging.
PR: Public relations isn’t just about buying ad space; it’s about crafting your message and establishing your market presence. Check out this insightful post from FirstRound Capital on common PR mistakes made by startups and small businesses. It offers tactical advice on identifying industry influencers, building relationships, and collaborating with reporters. You can also download our free public relations kit to enhance your PR efforts with inbound marketing and social media.
Co-marketing: Partnering with another brand can boost your visibility and leverage their reputation. This strategy helps you reach new audiences and create brand advocates beyond your current network. For more on how to effectively co-market, read our ebook on getting started with co-marketing.
Blogging: Maintaining a consistent, high-quality blog can significantly boost brand awareness. A well-run blog drives traffic to your website, converts visitors into leads, and establishes your authority in the industry. Additionally, it helps you build an email list
7. DECIDING WHERE TO FOCUS YOUR EFFORTS
Small businesses often face limited budgets and struggle to determine where to allocate resources for the best return on investment. They may feel uncertain about whether to focus on social media, content marketing, or learning SEO.
Understanding where to invest is crucial to maximizing the impact of your available resources.
HOW TO PRIORITIZE YOUR MARKETING RESOURCES EFFECTIVELY
One way to tackle this marketing challenge is by identifying where your target audience is most active and focusing your efforts there.
Using tools like One2Target, head to the “Behavior” tab to discover which social media platforms your competitors’ audiences visit most, their top interests, and the devices they use.
For example, if Facebook is the most popular platform among your target audience, you could prioritize creating engaging content for that channel.
You can also use Traffic Analytics to see which channels drive the most traffic to your competitors. By analyzing up to five competitors, you can review the “Traffic Channels” section and identify where to focus your efforts.
If “Organic Search” is a major traffic source, it may be worth increasing your SEO initiatives to capture similar results.
8. DIFFICULTY PRODUCING ENOUGH CONTENT
HOW TO GENERATE MORE HIGH-QUALITY CONTENT
If you’re struggling to produce enough content, creating a content calendar can be a game-changer. Planning your content ahead of time helps you stay organized and ensures consistent publishing.
Here’s an example of what a content calendar might include:
Content Calendar Template: Shows publish date, due date, owner, status, title/topic, and type.
Tip: Use our free content calendar template to get started.
Additionally, repurposing existing content is a cost-effective strategy. For instance, you can convert a blog post into a video or turn an infographic into social media posts. This approach is especially useful for small businesses with limited resources.
9. STRUGGLING TO GENERATE LEADS OR CONVERSIONS
Generating leads and driving conversions are crucial for any successful business, yet many small businesses find these tasks challenging.
Identifying and engaging potential customers can be difficult, especially with limited resources. Converting those leads into actual buyers is even more challenging, but essential for your business’ growth.
HOW TO BOOST CONVERSIONS THROUGH YOUR MARKETING EFFORTS
If your goal is to generate leads rather than make immediate sales, consider using lead generation ads. These ads are designed specifically to collect contact information, which you can then use to convert leads into customers through other channels like phone or email.
Many advertising platforms, such as Google Ads, offer options for lead generation campaigns:
Google Ads Campaign Objective: Shows the option to focus on leads.
You can optimize your ad copy and landing pages to encourage visitors to provide their email or phone number. This approach can be especially beneficial for small businesses that are just starting out.
Tip: You don’t need to run paid ads to generate leads. Check out our guide on effective lead generation strategies for additional ideas.
To convert visitors into customers, your website needs to attract and motivate action. Ensure your site is user-friendly, mobile-responsive, and features clear calls to action (CTAs).
QUICK TIPS FOR OPTIMIZING CTAS
- Keep Them Consistent: Focus on a single action per page, such as signing up for an email list or adding an item to the cart, to avoid overwhelming visitors.
- Place Strategically: Position CTAs near product images or alongside positive reviews to enhance credibility.
- Make Them Stand Out: Use contrasting colors and clear fonts to ensure CTAs are noticeable and easy to read on all devices.
10. BUILDING AN EMAIL LIST
To guide prospects through their buyer’s journey and convert them into customers, you need to build trust through consistent nurturing, staying top of mind, and continuously providing value.
A highly effective way to achieve this is by growing your email list.
Email marketing remains one of the most powerful channels, delivering an average return of $42 for every $1 spent.
Additionally, 59% of consumers say marketing emails can directly influence their purchasing decisions.
However, email marketing databases typically degrade by about 22.5% annually. It’s crucial for your marketing team to regularly maintain and refresh your email list with new contacts.
Be cautious of “building an email list” by purchasing one. Buying email lists is detrimental to your email deliverability and IP reputation, and it wastes resources. Instead, focus on genuine strategies for growing your list organically.
HOW TO ENSURE YOU’RE BUILDING AN EMAIL LIST PROPERLY
Instead of buying or renting email lists, focus on building opt-in lists. An opt-in list consists of subscribers who willingly provide their email addresses to receive your messages. These individuals are already interested in your brand and are more likely to make purchases, especially with proper nurturing. Tools like HubSpot or similar platforms can help you set up email sequences to nurture these leads.
To capture email addresses, ensure your website has the necessary functionality, such as a form builder or conversion tool.
Utilize social media platforms where your audience is active, such as Facebook or LinkedIn, to create engaging content that encourages users to join your email list.
Additionally, create demand through compelling blog content and easy subscription options. Blogging boosts your online presence, enhances search authority, and turns readers into brand advocates.
Revive older lists by sending a re-engagement message encouraging those interested to re-opt-in, while promising to remove inactive contacts.
Remember, growing your email list doesn’t always equate to increasing your list of sales-qualified leads.
11. HIRING TALENTED PEOPLE
According to a CNBC study, 52% of respondents identified labor quality as the most significant challenge facing small businesses. This statistic underscores the importance of having a strong team that aligns with business goals and works cohesively.
Moreover, 76% of hiring professionals report that attracting quality candidates is their biggest challenge. On top of that, onboarding new employees can cost over $4,000 each, a significant expense for businesses with tighter budgets. High employee turnover only exacerbates this issue, leading to increased costs in hiring and training new talent.
HOW TO FIND AND KEEP LONG-TERM EMPLOYEES AT YOUR SMALL BUSINESS
Hiring with a short-term focus—posting a job description, screening candidates, and making a quick decision—might seem efficient, but the high costs of recruitment make it essential to invest time in the process. Don’t settle for good when you can find great employees who will elevate your company.
Just as you create buyer personas for your customers, develop candidate personas for each role you’re hiring. These personas should reflect the specific needs of the role while aligning with your company’s culture.
Take proactive steps to attract candidates to your brand. By building a strong recruiting pipeline, you can bring predictability to your hiring process similar to your sales efforts. Convert these leads into applicants by showcasing your company’s strengths.
An effective employer brand is crucial in attracting top talent. Companies with strong employer brands can reduce training costs by up to 50% and attract more qualified candidates. A positive employer brand not only excites potential hires, but also boosts current employees’ pride in their work, reducing turnover by 28%. Investing in your employer brand will yield long-term benefits, both in recruitment and retention.
12. MANAGING WORKFLOW
Once you have the right team in place, the next hurdle is managing workflow effectively. Ensuring your team has the necessary processes and tools to work efficiently is key.
As a business leader, you can’t oversee every detail personally, so it’s crucial to strike a balance between focusing on strategic goals and providing your team with the support they need. Managing workflow becomes increasingly challenging as your business grows, but getting it right can yield substantial rewards. In fact, implementing marketing automation effectively can boost revenue by over 400%.
HOW TO COMBAT WORKFLOW ROADBLOCKS IN YOUR SMALL BUSINESS
- Conduct employee satisfaction surveys.
- Hold frequent one-on-one meetings with direct reports.
- Ensure direct reports have regular one-on-one meetings with their own team members.
- Schedule occasional skip-level meetings.
- Ask about business threats and the challenges causing the most frustration.
13. MEASURING YOUR MARKETING SUCCESS
Evaluating the effectiveness of your marketing efforts is crucial to ensuring you’re investing in the right areas. However, like many other challenges small businesses face, limited staff, time, and resources can make it difficult to measure these efforts accurately and efficiently.
Without clear metrics and the tools to track them, it’s challenging to determine if your strategies are yielding results.
HOW TO TRACK YOUR MARKETING PERFORMANCE AS A SMALL BUSINESS
Start by revisiting your marketing plan. Review the goals you set and the metrics you established to measure success, such as organic traffic, monthly leads, or target conversion rates.
Next, implement the appropriate tools and processes to track these key metrics.
For instance, if your goal is to increase organic traffic to your website, use Google Analytics. Navigate to the property you want to analyze, then go to “Reports” > “Acquisition” > “Traffic Acquisition” to view a graph of your primary traffic sources and detailed metrics like average engagement time and conversions.
Google Analytics Traffic Acquisition Report: Shows traffic sources and metrics.
Another valuable tool is Semrush’s Listing Management tool. It helps you track where your business is listed, check for listing issues, and monitor local rankings—ideal for businesses focusing on local SEO.
Semrush Map Rank Tracker: Displays local rankings for your business and competitors.
Also, track the number of reviews your business receives. Positive reviews can build trust with potential customers and influence your conversion rate. With Semrush’s Listing Management tool, you can monitor reviews across all your locations and even respond to them directly within the tool.
Semrush Review Management: Allows you to manage and respond to reviews.
14. FINANCIAL PLANNING
Increased resources can enhance capability, efficiency, and quality. However, obtaining these resources often depends on having sufficient capital, which many small businesses struggle to secure. According to reports, the lack of capital or cash flow is the top challenge for small businesses.
Moreover, securing small business loans from major banks is challenging, with approval rates at just 13.5% as of March 2021. Consequently, financial planning with limited resources and a constrained budget can be particularly complex for small businesses.
HOW TO SUCCEED WITH YOUR SMALL BUSINESS FINANCIAL PLAN
15. SCALING
Nick Rellas, co-founder and CEO of Drizly, highlights the challenge of balancing early scalability with the need to manage immediate tasks.
This issue is prevalent across various aspects of business—whether in product development, marketing, hiring, or other areas. For instance, while executives often drive for rapid growth, scaling too quickly can strain your resources, particularly in hiring top-quality talent.
Additionally, landing a major client can seem promising, but meeting their demands may become overwhelming, creating a challenge in scaling effectively while managing the associated pressures.
HOW TO FIX SCALING CONCERNS WITH YOUR SMALL BUSINESS
There’s no one-size-fits-all solution for this issue. As Rellas notes, “Depending on where you are in your business’s lifecycle, the scale will tip one way or the other, but you need both at different times.”
The key is to focus on the right details rather than every detail. For instance, product perfection might not be as crucial as delivering excellent customer service. It’s often better to launch a product that isn’t perfect and make improvements based on customer feedback. Once your product is in the market, you’ll quickly learn what works and what needs adjustment.
However, prioritizing customer service is worth the extra effort. As Jeff Bezos wrote in his 2016 letter to shareholders, “Obsessive customer focus is by far the most protective of Day 1 vitality.” Day 1 represents growth and innovation, while Day 2 signifies stagnation and decline.
While these are just a few of the many challenges small businesses face, proper planning and strategy can help mitigate many of them.
MCIVOR MARKETING IS READY TO HELP YOUR SMALL BUSINESS SUCCEED
McIvor Marketing excels in launching small businesses and setting them up for success. We understand the unique challenges faced by new ventures and provide tailored strategies to address them effectively. From crafting compelling brand narratives and designing engaging digital campaigns to optimizing customer acquisition and retention, our expertise ensures that every aspect of your marketing aligns with your business goals. By leveraging a blend of innovative tactics and data-driven insights, we help small businesses not only establish a strong market presence, but also scale sustainably and thrive in their respective industries.
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