The Challenges Small Businesses Face: A Deep Dive by Jenny at Rock Chocs
Running a small business is a rollercoaster ride, filled with exhilarating highs and daunting lows. While the dream of being your own boss is enticing, the reality is often riddled with challenges that can feel overwhelming. As a vegan entrepreneur at Rock Chocs, I've witnessed first hand the struggles that small businesses face, and I'm here to shed light on some of the most common obstacles.
Financial Hurdles
One of the most significant challenges for small businesses is securing funding. Traditional lenders often shy away from startups and small enterprises due to perceived higher risks. This can lead to a reliance on personal savings, crowdfunding, or high-interest loans, which can put immense financial pressure on entrepreneurs.
- Limited Access to Capital: Banks and investors are often hesitant to lend to small businesses due to their smaller size and potentially higher risk profile.
- Cash Flow Management: Maintaining a stable cash flow can be challenging, especially during seasonal fluctuations or unexpected expenses.
- Pricing Strategies: Striking a balance between competitive pricing and profitability can be a delicate act.
Marketing & Competition
Standing out in a crowded marketplace is another major challenge. Small businesses often struggle to compete with the marketing budgets and established brand recognition of larger corporations. Reaching the right audience and building brand awareness can feel like an uphill battle.
- Limited Marketing Resources: Small businesses typically have smaller marketing budgets and may lack the expertise to create effective campaigns.
- Competition from Large Companies: Big businesses often have significant resources and brand recognition, making it difficult for small businesses to compete.
- Staying Ahead of Trends: Keeping up with the latest marketing trends and technologies can be challenging for small businesses with limited resources.
Human Resources & Operations
Small businesses often face challenges in attracting and retaining talent. As a small team, the workload can be significant, and finding skilled employees who are a good fit for the company culture can be difficult. Additionally, managing day-to-day operations, from inventory control to customer service, can be demanding.
- Hiring and Retaining Talent: Finding and retaining skilled employees can be challenging for small businesses, especially in competitive markets.
- Work-Life Balance: Small business owners often work long hours and may struggle to achieve a healthy work-life balance.
- Operational Efficiency: Streamlining operations and maximizing efficiency is crucial for small businesses to stay competitive.
Overcoming the Challenges
While the challenges small businesses face are real, they are not insurmountable. By leveraging their agility, creativity, and strong customer focus, small businesses can overcome these obstacles and thrive. Here are some strategies to consider:
- Seek Funding Alternatives: Explore alternative funding sources such as government grants, crowdfunding platforms, or business incubators.
- Develop a Strong Online Presence: Utilize social media, search engine optimization (SEO), and content marketing to reach your target audience.
- Focus on Customer Service: Build a strong customer base by providing exceptional service and fostering loyal relationships.
- Embrace Technology: Leverage technology to automate tasks, improve efficiency, and streamline operations.
- Build a Strong Network: Connect with other entrepreneurs, industry experts, and mentors to gain support and guidance.
No Marketing budget means it can be challenging to grow your business
The challenges Rock Chocs has faced. When you do not have a budget for marketing and advertising it means it takes longer to grow your business. Ideally I need 30 good orders a week every week in order to pay my minimum business outgoings this is without replenishing stock or taking a wage. It means you have to learn to do all aspects of your business and as you cannot afford to hire someone yes you may not be doing the best job in terms of how you post to social media. Yes I would love to advertise and be on page one of google but I just do not have the money so you have to look at other ways to market your business from doing social medial posts, getting influencers to review your products, loyalty customer schemes are just some of the things you can do.
Choosing the right products to sell.
It will take time to find out what your customers love and what products they don't. I stock a variety of vegan products as some of my customers order lots of the snacks whilst other customers buy handbags and gift items regularly for birthday and Christmas gifts. The important thing you can do as a small business owner is only buy small amounts of stock if you are using wholesale sites choose brands that have a lower minimum order level as some brands have a minuimum order level of over £100 which then can make it costly especially if you have 3 different brands out of stock at the same time. Also contact brands directly to see if you can order a small amount of stock to see how things go as it is not good having 100 of one product that expires in 3 months and you have difficulty selling the product.
Ask your customers what brands and vegan products they use? So that you only buy products that they are interested in buying.
If you have an online shop you could also put products to pre order and only order from that brand if you have enough interest in that product.
Try and get products that have a long shelf life so that there is less known losses too especially when starting out as this can be expensive.
When I set up Rock Chocs in 2019 this was after I did level 1 to 5 of a raw chocolate making course and after formulating my own bath bombs. At the time the money I had went into getting ingredients, paying for my course, paying for my cosmetic assessment for my bath bombs. I had no investment coming in I used the small amount of money I had to set up my business and it was not much.
I had no salary coming in as I was made redundant when I was on maternity leave this was in 2007 and then when my only son was 2 he was diagnosed with a life threatening auto immune illness so I was my son's full time carer. So I have not had a salary now for 14 years so I set up Rock Chocs will a very small amount of money paid for my chocolate making course and for my ingredients to make my own bath bombs and get them assessed by a cosmetic company and approved. Then I had a enough to buy a small amount of stock and that was it. So you do not need thousands to start a business but you do need to be aware of your monthly costs and if possibly have about 3 months or more saved up of business costs so you are not stuck.
I have not taken a salary from the business because I am not bringing in enough to do this just yet as yes outgoings are alot so when you do set up your own business remember you will have monthly outgoings to pay from business insurance, any software you are using, ingredients to buy, packaging, card transaction fees to pay if you have your on line shop on shopify platform or similar, website costs, and lots of other costs. So my advice is to buy just a small amount of stock to sell or if you are making products yourself make a small amount and try and sell these first at local events, markets or craft fairs. If you are wanting to sell your products at a specialised market for example an art market or vegan market remember there will be lost more costs and stall cost can be over £50 to hire a store just for the day and if then you are travelling 2 hours to the event and paying car parking you will need to sell a lot to break even. So start small first.
Write up your own short term and long term plan for your business and review these regularly get support from other small business or join a support business group like Vegan Business Tribe that help you and your business.
My aim from September 2024 to December 2024 is to bring in enough money to pay my monthly bills and possibly save enough to have one to 2 months of over heads money in my bank account. I am worried as the last 4 months have been low sales so I do not have enough enough in my bank account to pay the next 4 weeks of bills so yes it is tough but I believe that with the products I have in stock for Christmas and with the passion and customer service I provide I can make these 3 months count.
If I have more customer orders it means then I can buy chocolate making ingredients and materials to make bath bombs (as the bath bombs I can't make at the moment as it will cost me over £500 to stock all the ingredients needed) but at the moment being realistic I am only making chocolate the bath bombs will have to wait for a long while as money needs to go on operating costs.
Remember as a small business you may have to find another job to do on top of your business until it starts paying off look to do this you may be able to consult, make bespoke products for another business, or use any of your skills to help another business or another business may hire you for certain projects.
It is very challenging times and with how the world is and the cost of living consumers have less disposable income and they are being more careful where to spend their money so if you can offer incentives, subscriptions, regular discount codes or offers that help them then this will also help your small business.
However you must also look at these costs to your business if you are offering free delivery but it is costing you over £6 to send out each order due to postage and packaging then look to see if this is viable doing this long term or look to see how you can save money on postage or packaging to help your business.
I do my best to support as many small business as I can by stocking products from smaller brands so it helps them out when I order and stock a product.
I also do my best to support as many small business when I shop so if you can do the same.
Also remember you are faced with bigger companies selling similar products to you so yes it can be challenging getting new customers especially when the likes of super markets and amazon sell lots of vegan products.
I am proud of what I have achieved I have done everything from buying stock to creating products without anyone giving me any money. I am proud that I have a high reputation for product range and service and that my business has won awards for the product range and ethics and customer service that I have provided.
I just need now to increase the number of orders I get per week is not an easy challenge but I will work hard as I do not want to be like so many other amazing business I know that have had to close due to the cost of ingredients, the cost of living and other external factors. So please support me and other small business so I can continue with my dream and eventually make a difference to my families lives.
Remember, running a small business is a marathon, not a sprint. Be patient, persistent, and adaptable, and you'll be well on your way to success. Jenny at Rock Chocs wishes you all the best in your entrepreneurial journey!