As a business owner, you have likely experienced the frustrations of slow growth or even stagnation in your business. Despite your best efforts, you may be wondering why your business is not growing as quickly as you’d like.

While there are many factors that can contribute to business growth challenges, some of the most common reasons SMEs struggle can be distilled into 5 key areas.

In this article, we’ll explore each of these areas and what you can do to overcome them.

 

1. Lack of a clear and compelling Value Proposition

 

Your Value Proposition is the core of your business and it’s what sets you apart from your competitors.

Without a clear and compelling Value Proposition, it can be difficult to attract and retain customers, resulting in slow or stagnant growth.

Some of the most common mistakes SMEs make when developing their Value Proposition include:

i) Focusing too much on features instead of the benefits/outcomes of what their products or services deliver

Your customers care more about the outcomes they can get from your product or service than the features themselves.

Outcomes allow customers to visualise what life would be like after engaging with your product or service. Features neither create any emotional connection with your customers nor generate any desire to buy.

ii) Trying to be everything to everyone

By trying to appeal to a broad range of customers, your business is not truly solving to a specific segment of customers with this pain.

For example, no doctor in the world can treat every illness. We need specialists, heart surgeons, brain doctors etc.

You get the drift.

iii) Using vague or weak language that has no energy

Your Value Proposition should be clear and specific, using language that speaks directly to your target audience that involves feelings.

Panadol has a clear Value Proposition: Everyday pain relief. People who visit their website, and pick up their products at pharmacies all understood this simple language and Value Proposition.

This is further exploited by their marketing and branding team in all your advertising, landing page, posters and packaging.

 

To overcome issues that cause an unclear value proposition, it’s important to start by understanding who your target customer is and what they really care about.

If you are selling to Consumers, knowing what Pains you are solving for them and identifying who has these pains through a Customer Persona research is critical.

If you sell to other Businesses, knowing your Customers’ Profile (revenue size, number of employees, industry) is critical.

When you start from there, you could develop a clear and compelling Value Proposition that speaks directly to their needs, pains, challenges and desires.

 

 

2. Ineffective marketing and sales strategies

 

Even with a clear and compelling Value Proposition, it can be difficult to drive growth without effective Marketing and Sales strategies that are aligned with the business strategy.

Some of the most common mistakes SMEs make when developing their marketing and sales strategies include:

i) Not understanding your target audience

Marketing and sales strategies that do not create curiosity and generate desire for your products/services are difficult to create without a deep understanding of your target audience.

Questions for you to discover your target audience:

What are the pains, challenges, issues, blockers and frictions your target audience has to deal with which your product/service could help them remove?
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Which channels do your target audience engage with to discover solutions to their problems?

ii) Focusing too much on the short-term.

While it’s important to acquire customers to drive sales and create cashflow in the short-term, it’s equally important to build long-term relationships with your customers.

You spend a lot of money to attract and acquire new customers but if you cannot retain customers, you are not addressing the customer churn.

Imagine a cup full of holes. No matter how much water you pour into the cup, you’ll never get the cup full and you lose time, money and energy filling up the cup.

iii) Not leveraging the right channels.

There is a wide range of marketing and sales channels available. It’s important to identify the ones that are most effective for your business based on your target audience.

If you are prospecting for business on Facebook when you are doing marketing for a B2B business, it is unlikely that you will make any meaningful business connections from there, compared to Linkedin.
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Linkedin Post
296 likes, 60 comments, 22 reposts

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.Facebook Post
25 likes, 21 comments, 1 share

Look at this one post that Scaling-Up! did on LinkedIn vs Facebook.
The post on Linkedin generated way better exposure for the business compared to the post on Facebook.

 

To overcome these challenges when developing marketing and sales strategies, you can start by identifying the demographics, psychographics, and behaviour of your business’s target audience.

You could use this information to develop marketing messages that are tailored to your audience.

As a result, your business could have a better understanding of its target audience and could focus marketing efforts on the channels that the target audience is most likely to use.

From there, you can develop a comprehensive marketing and sales strategy that combines both short-term and long-term goals, leveraging the right channels to drive growth.

 

 

3. Poor financial management

 

Without effective financial management, it is difficult to achieve sustainable growth.

Some of the most common financial mistakes SMEs make include:

i) Not tracking their finances closely.

By failing to track their finances closely, SMEs risk running out of cash or missing opportunities for growth. Questions to help you discover if you are tracking your finances closely:

• What is your monthly burn rate?
• Do you review your cashflow at least once every 2 weeks?
• Do you have an Ageing Receivable collection process?
• Is your Cash Conversion Cycle less than 45 days?

ii) Not controlling costs.

Controlling costs is a key part of effective financial management, and SMEs that have no cost control mechanism and processes keep losing money.

iii) Not planning for the future.

Effective financial management requires a long-term view and SMEs that fail to plan for the future miss opportunities to take on larger projects or acquire a competitor. For example, does your business keep a reserve of at least 6 to 9 months of your operating expenses to deal with market changes?

 

To overcome the challenges of poor financial management, it’s important to start by designing your financial strategy, and how often you need to track and monitor, your cash flow and your profitability.

From there, you can develop a financial plan that controls costs and sets your business up to win!

 

 

4. Poor task prioritization and low productivity

 

Many SMEs often struggle with managing tasks and productivity, which can hinder their growth. Poor task prioritisation leads to missed opportunities, unfinished work, and unproductive team members.

This ultimately affects the overall output of the business.

That’s why it’s important for business owners to focus on performing tasks that only they could do, so they could delegate tasks that their employees could perform to manage productivity and guide their team members to do the same.

To achieve this, business owners can use the Eisenhower matrix and other effective techniques such as time blocking, delegation, and prioritization.

Implementing a Daily Ops Huddle also helps to align with your employees on what the priorities for the day are.

Using time blocking, you could divide the day into manageable chunks, and then assign specific tasks to each block.

For example, dividing the workday into 3 blocks of 2 hours and assigning tasks to each block according to the importance of the tasks helps to get things done according to the priority of the day.

Delegation is about empowering team members to take on specific tasks, while prioritization is about identifying and focusing on the most important tasks.

By implementing these techniques, SMEs could immensely improve their self-management and create more time and productivity, which will ultimately help them grow their business.

 

5. Lack of Clear Business Strategy

 

Having a clear and effective business strategy is crucial to growing your SME sustainably.

If you don’t have a business strategy, you cannot communicate to the entire company what is the business focus, direction, and purpose.

This results in poor business decisions, or worse, getting paralysed by the fear of making a mistake.

A business strategy is a plan of action that outlines how a business will achieve its goals and objectives.

Without a strategy, it is like sailing a ship without a compass.

You may be moving, but you don’t know where you are going.

To develop a clear business strategy using the Scaling-Up! Play to Win Strategy framework, you must identify your core purpose, vision and mission.

You must develop your Core Values to guide the organisation in decision-making.

You must understand who your right-fit customers are, and you must assess and understand your business core capabilities and gaps.

Once you have a clear understanding of these factors, you can then create a plan that outlines the steps you need to take to achieve your goals.

A well-designed business strategy should be regularly reviewed and adapted as your business grows and the market evolves.

Growing an SME is challenging and is not for the faint-hearted.

By recognizing these challenges, you can design the next-best decisions and actions to overcome them.

 

Continuous Improvement in Business

 

Remember, building a successful business is a journey, and the road to success is rarely smooth.

But with the right mindset, knowledge, and resources, you can overcome any obstacle and achieve your goals.

This requires a willingness to learn, invest in the right resources, and focus on building a sustainable business.