7 Challenges All Businesses Face
Running a business these days is tricky. What was so useful yesterday, has suddenly lost its utility. New concepts are emerging. Old ones are getting obsolete. Therefore to analyze today’s business concepts, trusted business entities like Marketing Gurus Australia will tell you that business is changing its course almost daily.
Technological advancements are bringing in new business innovations daily which must be adopted. And that is not all. Customers’ preferences are no more static. Tastes, fashions, and expectations are changing daily. A business that cannot keep pace with these changes cannot survive at all. That is why so many businesses that seemed to be invincible only a couple of years ago, came down within a matter of months. Sears, Kodak and Nokia are perhaps some of the most significant examples of this phenomenon.
In this highly charged business environment. There are some common challenges that all businesses must face.
Here are some of the challenges which businesses face:
Table of Contents
1.Keeping the Integrity of the Business.
This is perhaps the most important challenge every business is facing these days. Businesses have become very demanding. Some ROIs need to be taken into account. Some competitors need to be confronted. And then, there are the customers whose expectations are growing by the day.
In this highly charged environment, every business is struggling. They are tempted to do things that they wouldn’t dream of doing only a few years ago. They would be tempted to hold back critical information about the product/service, make amendments in the product, and cut corners where they shouldn’t.
There are a few business owners who succumb to these temptations. Such practices may seem beneficial in the beginning but they serve to erode the very foundation on which great businesses are built upon: Trust.
If there is no trust or lack of it, between a business and its customers, it will never be able to survive in the long. Such a lack of trust is infectious. It will affect the employees of the business, its managers, executives, and also the shareholders. If so much distrust prevails, the business will never be able to compete in the market, and will eventually perish.
2.Management of Cash Flow
Resource management is a crucial aspect of any business. An entity might look very profitable on paper, but if it is unable to manage its cash flows, its receivable will increase gradually. This will choke its cash and very soon it will become unable to carry on its operations. The business needs to have a system for managing its cash daily. This will enable it to meet its payment obligations on time. Moreover, receivables from clients must be kept under control.
Cash flow management becomes even more challenging owing to the strict lending regimes incorporate by banks and financial institutions. Banks are reluctant to extend credit to a business that may be in trouble. If a business finds itself in cash flow trouble, and there is little chance of cash injection through banks, it will find itself going down under.
3.Highly competitive Environment
These days starting a business is not a challenge. It only takes a domain name and registering your business. However, it’s the competition that poses the biggest challenge.
The ease with which people can start their businesses has created a lot of suppliers in the market. But the market place is still the same in terms of volumes. This means that every business that wants to have a piece of the pie, must be very efficient, agile and productive.
The cut-throat competition prevailing in the market calls for businesses to excel at their product/service. In fact, rather than trying to produce a range of products, it is better to stick to the ones that you can manage more efficiently. If your precut is better than the others, you will have no difficulty selling it. You will be able to make good profits even if you produce just one item. Businesses who can meet this challenge can offer satisfying customer experience and hope to make handsome profits.
Retain your existing customers, and bringing in new ones is a challenge for every business. With the advent of the internet, social media, and mobile applications, it has become very easy to get your message through to your customers. But, the same ease of communication is also available to your competitors as well. This means that your marketing campaign should be highly specific, and seek to target an audience that needs your product. You must know your niche market, its preferences, the advantages of your product, and the right way to reach them.
However, once you reach the customer and succeed in convincing him/her to buy from you, your next challenge comes right then: how to retain that customer in the middle of so much marketing information he/she is receiving daily from your competitors?
Another point that you must keep in mind is that most customers are currently very conservative in their buying. They are most concerned about the cost-effectiveness of their purchases. This calls for a more comprehensive approach towards the pricing of your products to gain more customers.
Markets have always been unpredictable for the business owner. But, currently, the unpredictability factors have increased manifold owing to frequent changes in fashion trends, technological innovations, and the availability of substitutes.
Unfortunately, the increased unpredictability has resulted in the development of a short-term approach. Businesses are reluctant to make long-term investments in their product development because they are not sure whether a certain product will be in-demand in the next couple of years.
The challenge faced by most businesses is to carry out strategic planning for at least the next five years. Businesses are supposed to be perpetual. The short-term horizon only serves to accelerate the demise of the business in the absence of concrete long-term goals.
Human Resource Management
One of the biggest challenges faced by businesses is the recruitment of the right staff with the right skill set for a particular job. And an even more pressing challenge is to retain them and mold them into the business’s environment.
When a group of people is working as a team, their different personalities can affect the overall working atmosphere and the resultant product. The great challenge for the business owner is to learn to deal efficiently with different kinds of people and hold them together in such a manner that their efficiency is not impaired in any way.
Coping with the Regulatory Framework
When the regulatory framework of industry changes for any reason, it becomes a cause of concern for the business. Moreover, a business is subject to several regulatory requirements at the same time including (but not limited to) finance, environment, and energy. Then, there are regulations concerning your workforce
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It is a challenge for the business to not only understand all these requirements but also make sure that it complies with all of them in letter and spirit.
Business is like life. Without challenges, it would mean nothing. Business entities face many challenges, a few of which have been discussed above. But, none of these challenges pose an existential threat to the business, if it is fully prepared. The key is not to be afraid of these challenges, but to be ready to deal with them as soon as they come up.