8 Challenges that Affect the Growth of Small and Medium Local Online Sellers
Growing businesses encounter a range of challenges. As a business grows, different problems and opportunities demand different solutions – what worked a year ago might not be the best approach now. All too often, avoidable mistakes cause businesses to fail.
Recognizing and overcoming the common challenges associated with growth is crucial if your business is to continue to grow and thrive. Importantly, you need to make sure that the steps you take today don’t create additional problems for the future.
This article highlights challenges that most commonly affect the growth of small and medium local online sellers, and outlines what you can do about them.
Small and Medium Local Online Sellers Growth Challenges
You’ve launched a website or registered to e-commerce platform. Your online store is stocked with products and ready to go. Now what? Joining the e-commerce industry takes strategy, persistence, and focus – and it can help you establish a thriving business.
Take a look at 8 of the biggest challenges that most commonly affect the growth of small and medium local online sellers – and creative ways to overcome them.
Keeping Up with The Market
Market research isn’t something that you only do once you launch your business. Business conditions continually change, so your market research should be continuous as well. Otherwise, you run the risk of making business decisions based on outdated information, which can lead to problems or even business failure.
The plans that you made a year ago aren’t necessarily applicable now. Market conditions are continuously changing, so you need to revisit and update your business plan regularly to keep up with the market. As your business grows, your strategy also needs to evolve to suit your changed circumstances. For instance, your focus is likely going to change from winning new customers to building profitable relationships and maximizing growth with existing customers. Often, existing business relationships have greater potential for profit and may also provide reliable cash flow.
At the same time, every business needs to keep up with the ever-changing market and be alert to any new opportunities.
Finding the Target Audience
When starting any type of business, you will have probably identified your target audience in your business plan. However, actually finding those customers can actually be quite difficult. Fortunately, there are actually many ways to overcome such problems.
When utilizing social media or even traditional PR, remember that not all channels will automatically be applicable to your business. So, when you start your social marketing, first identify which platforms are going to actively work for you and help you reach your target audience. This is a common mistake made by online businesses when they are starting out and can hinder their growth.
Remember, each social media platform – no matter how similar they may seem – all have different purposes. So, before you go about investing time, money, and effort into creating and promoting your content on social platforms, try to test it out as a user first. This will help you get a feel for what kind of engagement you are likely to receive.
Cash Flow and Financial Management
Good cash flow control and financial management is important for any business. For a growing online business, it’s crucial – cash problems can be the biggest factor to limiting the growth of a business.
Making the best use of your finances must be a key element in business planning and evaluating new opportunities. If you have limited resources, you may have to pass up promising opportunities if pursuing them would mean robbing your core business of essential funding.
You must carefully control every element of your working capital to maximize your free cash flow. Effective credit management and tight control of overdue debts are highly important. Effective supplier management and stock control tend to become increasingly important as your business grows as well. Holdings of obsolete stock may become an issue that needs periodic clearing up. You may want to work with suppliers to reduce delivery cycles, or switch to a supplier and system that can handle just-in-time delivery.
Digital marketing is a valuable asset to your business’ growth and helps you establish an authoritative online presence. But, why is digital marketing important? By investing in digital marketing, you can help your business grow.
With the growth of the Internet, more and more people are spending their time online. Over 59% of the world’s population are active internet users. It’s become an integral part of day-to-day life to check social media, conduct searches, and purchase products online. Your customers are online, which further highlights the need for digital marketing. They are browsing the web looking for your services or products – if they can’t find what they are looking for because you don’t have an online presence, you risk losing those leads to your competitors.
Further, digital marketing allows you to target your ideal audience. Imagine being able to market directly to people who are interested in your services or products. With digital marketing, you have the capability to reach leads directly. You no longer have to hope that people will see your traditional marketing efforts and contact your business. With digital marketing, you can target your audience more precisely compared to traditional methods. You can input key details about your target audience and use that information to shape your digital marketing campaigns. It makes it easier for you to reach the right people.
Ignoring Business Indicators
Every business owner wants revenue growth, but what form will it take and are you ready to grow in the area? Regularly monitor and study your business indicators to identify growth opportunities. This includes your conversation rates, market trends, and your sales pipeline.
Things to look out for include success in one location or market and the potential to expand into another. Is your sales pipeline trending positively? Is success in one product development area opening new doors of opportunity for others?
If you ignore your business indicators, you won’t be able to capitalize on the opportunity for growth when it presents itself.
Not Taking Risks into Consideration in the Early Growth Phase
Business growth doesn’t come without any risk. As you plan your growth strategy, make sure to have a ‘Plan B’ in place that accounts for any challenges along the way that might hinder your business growth. Things like manufacturing issues, cash flow challenges, unexpected expenses, and soon. Identify these risks as you plan your growth strategy and think about ways you can fix or get around them.
Maintaining Your Customer Base
Once your business has become a little more established and has built up a customer base, you will have to work to retain that by keeping them interested. In this day and age, offering quality services is not always enough; your customers need stimulation to keep them using your products or services. Think of additional ways to keep your customers happy so that they would stick with you. If you don’t think of ways to maintain your customer base in today’s highly competitive online market, another company will simply take your customers away from you.
Outdated Technology and Lack of Tech Knowledge
Having the right technologies – and the right knowledge about how to use them – is highly crucial if you plan to do business online. Using outdated technology and a lack of tech knowledge can hinder your business’ growth and success.
Whether your employees are using slow computers that hinder their productivity or your lack of cloud computing software prevents you from fully embracing the perks of remote working, outdated technology can be a big barrier to growth and success. The costs of new tools and devices may seem like too much, but if you invest in the right technologies, you have the potential to experience growth.
Outdated software and devices are not the only technology-related barriers to business growth. Many entrepreneurs are also held back by a lack of tech knowledge. In an effort to address this problem, some business owners enroll in classes and courses so that they can be a ‘jack of all trades’ and manage every aspect of their business. However, this can take up time that you could have spent on managing the business. Instead, many businesses may benefit from outsourcing their IT support – by investing in an external IT company, you can access several experts’ skills at the fraction of the cost you would need to recruit these skilled technicians in-house.
The Bottom Line
No matter how passionate you are about your online business and no matter how hard you work, you will most likely encounter several challenges on your path to growth and success.
Some challenges that most commonly affect the growth of small and medium local online sellers, include keeping up with the market, finding the right target audience, cash flow and financial management, and outdated technology – just to name a few.
Successfully navigating these challenges will be crucial if you want to grow and thrive in the highly competitive online marketplace.