Despite the current economic headwinds, small business owners are still optimistic about growth and flexible enough to turn challenges of a highly dynamic and rapidly changing business environment into opportunities.
Mags Ponnan, Head of Customer Value Propositions at FNB Business, recently spoke to business owners that participated in the FNB Business Incubator. He found it encouraging engaging entrepreneurs that think out of the box, reinvent themselves and actively use innovation to tackle and overcome business challenges.
Many of these entrepreneurs were eager to get guidance from mentors and experts on how to tackle some of the key business issues that keep them awake at night:
- Customer retention – keeping customers happy continues to be a challenge for many small businesses, especially when consumers start cutting back on spending and look for more value for their money. SMEs are continuously trying to meet the ever-changing needs of customers while ensuring brand loyalty.
- Cash flow management – trying to keep a business afloat without having enough cash on hand can often lead to disaster. The solution lies in adequate cash flow management strategies, which vary depending on the type of business. SMEs have to place an emphasis on annual cash flow forecasts and regularly review them as business conditions change.
- Finding the right mentor – small business owners are increasingly recognising the impact of getting guidance from experts who are familiar with their respective industries and have successfully navigated through an influx of challenges. However, finding the right mentor continues to be a challenge.
- Growing revenue and profits – one of the most common issues that keep business owners awake at night is growing revenue and remaining competitive during tough times. Increasing revenue cannot be done overnight, it usually involves reviewing the business strategy and making sure that processes, operations and systems are geared for business growth.
- Managing administration –business owners usually find it difficult focusing on their core business operations while having to take care of time-consuming, but necessary administration related tasks. Depending on the size and nature of the businesses, more entrepreneurs are making use of technology and innovation to optimise their administration processes.
- Rising costs – factors such as increasing interest rates, fuel prices, transport costs, inflation and exchange rate volatility continue to put strain on the bottom line of SMEs. Businesses now have to focus more on managing costs and variables under their control, while planning for those that they cannot control, by focusing on providing high quality customer experience and products and services that meet real customer needs, and that can outlast these tough economic conditions.
- Access to market – access to markets can significantly boost the competitiveness and growth of SMEs by opening up opportunities for partnerships with established organisations across a number of industries. Business accelerators and incubators offer a perfect platform for SMEs to network and meet like – minded entrepreneurs who are eager to form partnerships or share ideas.
“Notwithstanding these challenges, with the right support and strategic guidance, SMEs have the potential to contribute more to the competitiveness of the country, as well as sustainable economic growth and job creation. The FNB Business Incubator has therefore been established to help these entrepreneurs realise their true potential, and also equip them with the necessary tools to overcome the day to day challenges of running and growing successful businesses,” concludes Ponnan.