Being competitive means your small business is doing as well or better than others offering similar products or services. But customers can always take their business elsewhere. The challenge for small-business owners and managers is staying competitive. And that requires, among other assurances, a skilled workforce, enough cash flow to keep the business going and the latest technological tools.
Customers have more buying options than ever, with business startups always emerging and vying for their patronage. Managers of brick-and-mortar businesses are competing with consumers who spend their dollars online. And since buyers spend less when the economy slows down, businesses must be prepared for decreases in revenues. Selecting the best and most cost-effective ways to connect with buyers, whether through paid advertising or social media, is another ongoing challenge for managers. Managers must keep customers from defecting to the competition, while finding and attracting new buyers. Managers can build customer loyalty by giving customers the goods or services they want and outperforming competing firms.
Robert Half, the international staffing specialist firm, found that 60 percent of the 300 small-business owners and managers it its 2013 survey cited an inability to find skilled workers as their biggest employee problem. All companies surveyed had fewer than 100 employees. High-profile brands and sizable human resource budgets give large companies recruiting advantages over small businesses. But Paul McDonald, a Robert Half senior executive, believes that small businesses can attract job candidates who are looking for a place to start and grow in their careers. Robert Half chairman and CEO, Max Messmer, advises managers to stress the benefits of working in a small company to job candidates and have detailed and accurate job descriptions, which reduces the number of resumes from unqualified job applicants. He also recommends that managers join professional associations and take part in community activities to build and expand a network of qualified candidates.
The National Federation of Independent Business, a nonprofit, small-business advocacy organization, reports that insufficient cash flow is a common problem for small companies. The NFIB regularly polls its members, one in five of which face continuous cash-flow problems. According to the organization, managers confuse cash flow with other business assets, such as office equipment, furniture, vehicles and property. But small businesses need cash to meet payroll, pay taxes and purchase supplies to stay competitive. NFIB members attribute most cash-flow problems to payment defaults by customers and vendors. Some members handle the problem by requesting partial payments from buyers upfront or borrowing money through loans or personal savings. Other members adjust their own scheduled purchases and payments, or pursue non-payers more aggressively.
Technology changes quickly, and unless small-business managers have the knowledge and, in some cases, the finances often required to get up to speed, they can't stay competitive. Brian Solis, a noted author and blogger and principal analyst at the research firm Altimeter Group, surveyed small businesses' use of technology. In the "#SBWSurvey," he and research partner Cox Business found that 56 percent of the 605 respondents in the nationwide study believe that technology enhances rather than hinders their businesses. But about one-third revealed that they were trying but not succeeding in keeping up with monumental technological changes. Another one-third indicated that they weren't using social media, such as Twitter, Facebook or LinkedIn, to grow their businesses. Mr. Solis advocates using social media because conversations between business owners and users in these online communities could turn into sales.