A recent government survey has shown that 78% of small business employers perceive the economy as a major obstacle to business growth. This is followed by taxation (57%), competition (56%), regulations (52%) and cashflow (50%).
The majority of those citing the economy as an obstacle cited reduction in demand, the pressure to reduce prices, increased energy costs and the increased cost of raw materials as the main reasons.
Sixty eight percent of employers plan to grow their business over the next 2-3 years and 61% said that improving leadership skills was a major strategy for business growth.
You can get the full report and access to the data tables here.
So what can businesses do to overcome these obstacles? Here are six suggestions:
- When demand goes down, it’s essential to get more creative with strategies for capturing market share. How many lead generation strategies do you have in place that you know are currently working? If you had one or two more, how much more market share would you be able to command?
- It’s not just about market share. In a difficult economy it’s even more important to focus on wallet share becaause it’s typically six times cheaper to help your current customers to buy again than it is to find a new customer. What are you doing to keep in touch with your current customers?
- Businesses that differentiate themselves from their competition consistently do better in a difficult economy than do their “me-too” competitors and this is a fundamental factor in avoiding price pressures.
- It’s also important to be very clear about your target market – making it as specific as possible. It’s so much easier and more effective to communicate with them.
- Avoiding price pressures, as mentioned, and having a great credit control system in place are two key factors in avoiding cashflow issues.
- And if you can’t beat the regulations, then use them to your competitive advantage (perhaps like Duncan Bannatyne did when building his care home business).
The problem with several of the obstacles highlighted by the survey is that it’s not possible to do anything about them. But there are definitely things that can be done to grow despite these obstacles.