6 Reasons Why Small Businesses Struggle to Get Successful

August 10, 2023


Jan Vasil

Starting a small business is a dream many of us share, but navigating the road to success is filled with twists, turns, and unexpected challenges. Whether you’re a budding entrepreneur or have been in the game for a while, the struggles of running a small business can feel overwhelming at times.

I know this firsthand. When I started my own business, I was filled with excitement and optimism. But soon, I encountered obstacles I never anticipated. From finding sufficient funding to competing with bigger players, I realized that success required more than just a great idea. It took constant learning, adaptation, and the courage to face my weaknesses head-on.

Recommended reading:

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In this article, we’ll explore some of the common challenges that small businesses often encounter. These are not abstract concepts but real-life issues that I’ve faced and seen others wrestle with:

  1. Lack of a Clear Business Plan
  2. Insufficient Funding
  3. Poor Marketing and Visibility
  4. Competition with Larger Players
  5. Failure to Adapt to Market Changes
  6. Dependence on a Single Product or Service

Each of these topics will provide insights into why these issues are crucial and how to overcome them. The examples and actionable steps included are tailored to help you turn these challenges into opportunities.

Whether you’re just starting or looking to grow, understanding these struggles can make your journey smoother and more rewarding. So grab a cup of coffee, settle in, and let’s explore together how to make your small business not just survive but thrive! 🚀

1. Lack of a Clear Business Plan

What’s the Big Deal?

Imagine you’re on a road trip without a map or GPS. You might have a general idea of where you’re going, but you’ll probably take some wrong turns, and it’s going to take you much longer to get there. That’s what running a small business without a plan is like.

A business plan is more than just a document; it’s your roadmap, guiding you through the jungle of starting and running a business. Here’s why it’s so crucial:

  1. Direction & Focus: Your business plan lays out what your business is about and where you want to take it. Without this, you might find yourself drifting aimlessly.
  2. Attracting Funding: Want a loan or investors? You’ll need a plan to show them. Banks and investors want to see that you’ve thought things through.
  3. Identifying Your Audience: Who are you selling to? A clear plan helps you identify your target customers and the best ways to reach them.

Example: Bob’s Jam Misadventure

Well, Bob had a great product but no real plan on how to sell his jams. Was he targeting busy moms looking for organic food, or foodies in search of exotic flavors? Without knowing his target audience, he was trying to sell to everyone and getting nowhere.

More Real-Life Scenarios:
  • Jane’s Yoga Studio: Jane wanted to open a yoga studio but didn’t specify what made hers different. Was it for hardcore yoga enthusiasts or beginners looking for relaxation? Without clarity, she struggled to attract the right clients.
  • Sam’s Tech Service: Sam was great at fixing computers but didn’t plan how to reach customers. Should he have focused on corporate clients or individuals? Without this focus, his marketing efforts were scattered and ineffective.

Actionable Steps: Let’s Make a Plan!

  1. Understand Your Business Inside Out: What do you do? Who are you doing it for? Why should they care? Answer these questions, and you’ve got the foundation of your plan.
  2. Set Clear Goals: Where do you want your business to be in one year? Five years? Set achievable, specific goals.
  3. Outline Your Strategy: How will you reach your goals? Break them down into smaller steps, and outline how you’ll achieve each one.
  4. Get Professional Help if Needed: Business planning isn’t everyone’s strong suit. If you’re struggling, consider hiring a professional or using online resources to guide you.
  5. Review and Revise Regularly: Your business plan isn’t set in stone. As you grow and learn more, you may need to make adjustments. And that’s totally okay!

Conclusion: Make Your Plan, Drive Your Success

Running a business without a plan is like sailing without a compass. You might enjoy the adventure, but you’re unlikely to reach your destination efficiently. So take the time to plan. It might seem boring, but it’s like building the foundation of your house – without it, everything else might just fall apart.

Got a business idea? Start planning today! And hey, if Bob could turn his jam-making hobby into a thriving business with a little planning, so can you. 🚀

2. Insufficient Funding

What’s the Big Deal?

Money isn’t everything, but when it comes to starting and running a small business, it sure is important. Think of funding like the fuel in your car; without enough of it, you’re not going anywhere. Here’s what can go wrong without sufficient funding:

  1. Can’t Buy What You Need: Whether it’s equipment, inventory, advertising, or hiring staff, everything needs money. Without it, you’re stuck in the starting blocks.
  2. Stunted Growth: You’ve got big dreams, but without funding, those dreams might stay just that – dreams. Money helps you expand, take on new projects, and grow.
  3. Constant Stress: Running a business is tough enough without worrying about every penny. Lack of funds can lead to sleepless nights and bad decisions.

Example: Sally’s Pet Grooming Salon

Sally had a dream of opening a pet grooming salon. She had passion, skills, and a great location, but she didn’t have enough money for proper grooming tools or advertising. Without those, she struggled to attract customers and provide the service she wanted. It’s like trying to cook a gourmet meal without the right ingredients.

More Real-Life Scenarios:
  • George’s Bike Shop: George wanted to sell custom bikes, but without enough funding, he couldn’t keep enough parts in stock. Customers had to wait longer, and some went elsewhere.
  • Tina’s Tutoring Service: Tina wanted to start an online tutoring platform but didn’t have the funds to build a proper website. Her business struggled to look professional and attract clients.
6 Reasons Why Small Businesses Struggle to Get Successful

Actionable Steps: Finding the Fuel for Your Small Business

  1. Know What You Need: Before looking for money, understand what you need it for. Break down your expenses and make a clear budget.
  2. Explore Different Sources: From bank loans to crowdfunding to angel investors, there are many ways to fund your business. Research and find what fits your needs.
  3. Start Small if Needed: Maybe you can begin with a smaller version of your dream and grow from there. It’s better to start small than not start at all!
  4. Be Transparent and Honest: If seeking investors or crowdfunding, be clear about what you need and how you’ll use the money. People appreciate honesty.
  5. Consider a Business Partner: Sometimes, two heads (and wallets) are better than one. A business partner might bring needed funds and fresh ideas.

Conclusion: Fueling Your Dream

Insufficient funding is like trying to drive a car with an empty gas tank; you won’t get far. But don’t let that scare you. Many successful businesses started with a tight budget and big dreams. The key is understanding what you need, finding the right funding sources, and being creative.

And hey, if Sally could turn her passion for pets into a bustling salon with a little financial planning, so can you. Keep dreaming, keep planning, and keep reaching for those stars. 🌟

3. Poor Marketing and Visibility

What’s the Big Deal?

Picture this: You’ve cooked the most delicious meal ever, but nobody’s at the table to eat it. That’s what having a business with poor marketing and visibility is like. You could have the best product or service in the world, but if people don’t know about it, they won’t come. Here’s why this matters:

  1. No One Knows You Exist: You might be the best in town, but if people don’t know about you, they can’t buy from you.
  2. Lost Sales Opportunities: Every person who doesn’t find you is a potential sale lost. Those add up!
  3. Difficulty Building a Brand: Branding isn’t just a fancy logo. It’s building an identity that people trust. Without visibility, it’s hard to build that trust.

Example: Jim’s Coffee Shop

Jim’s wanted to open a Coffee Shop with the best latte in town. Jim knew his coffee was great, his regulars knew it, but not many others did. He had no website, no social media, no signs promoting his special blend. It’s like having a secret party and forgetting to send out invitations.

More Real-Life Scenarios:
  • Kelly’s Custom Jewelry: Kelly made beautiful jewelry but only sold to friends and family. She didn’t use social media or online stores and missed out on countless customers.
  • Frank’s Fitness Gym: Frank’s gym was new and offered innovative training, but he relied only on word-of-mouth. A lack of online presence made it hard for potential clients to find him.

Actionable Steps: Let’s Get You Seen!

  1. Identify Your Audience: Who are you trying to reach? Understanding your audience helps you find them.
  2. Create a Simple Website: It doesn’t have to be fancy, but a website gives people a place to find you. There are many user-friendly platforms to help you do it yourself.
  3. Get Social: Create social media profiles. Share your story, products, or services. Engage with your community.
  4. Consider Local Advertising: Sometimes, a small ad in a local paper or online platform can make a big difference.
  5. Ask for Reviews: Happy customers? Ask them to leave reviews online. Positive reviews can work wonders.
  6. Network in Your Community: Join local business groups, attend events, and make connections. Sometimes, face-to-face networking can be powerful.

Conclusion: Let the World See You Shine

Marketing and visibility aren’t about being flashy or spending big bucks on advertising. It’s about letting people know you’re here and you have something great to offer.

If Jim can transform his hidden coffee shop into the town’s favorite morning stop with a little social media love and some community networking, so can you. Get out there, make some noise, and let the world see what you’ve got. Your future customers are waiting to discover you! 🎉

4. Competition with Larger Players

What’s the Big Deal?

Let’s face it, competing with big companies can feel like a mouse taking on an elephant. They have more resources, more money, and a broader reach. It’s like playing a game where the odds seem stacked against you. But here’s why this matters and what you can do about it:

  1. Price Wars: Bigger companies often offer lower prices that you might struggle to match.
  2. Marketing Might: They can spend more on advertising and reach more people more quickly.
  3. Brand Recognition: Big names are often trusted names. Competing with that can be tough.

Example: Lisa’s Little Bookstore

Lisa had a superb plan to open a cozy little bookstore. She struggled when a big-chain bookstore opened nearby. They had more books, longer hours, and discount prices. But Lisa had something they didn’t – a personal touch. It’s like choosing between a home-cooked meal and fast food.

6 Reasons Why Small Businesses Struggle to Get Successful
More Real-Life Scenarios:
  • Tom’s Organic Grocery: Tom couldn’t match the big supermarkets’ prices, but he offered fresh, local produce and personalized service.
  • Carla’s Handmade Clothing: Carla’s unique designs couldn’t be found in big department stores. Her personal style created a loyal customer base.

Actionable Steps: Small But Mighty

  1. Find Your Unique Value: What can you offer that big companies can’t? Maybe it’s personalized service, unique products, or a community feel.
  2. Focus on Customer Experience: Big companies might win on price, but you can win on experience. Be the business that knows customers by name.
  3. Build a Loyal Community: Engage with your customers. Host events, create a loyalty program, or simply be a friendly face.
  4. Use Social Media Wisely: Share your story, connect with customers, and create a community online. You can’t outspend big companies, but you can out-connect them.
  5. Collaborate with Other Small Businesses: Sometimes, joining forces with other local businesses can create a strong community presence.
  6. Don’t Try to Beat Them at Their Game: You might not win a price war, but you can win by being different, special, and personal.

Conclusion: Embrace Your Smallness

Competing with larger players isn’t about becoming one of them or beating them at their own game. It’s about embracing what makes your business special.

If Lisa can turn her little bookstore into a community hub where customers feel at home, so can you. Your small size allows you to connect with customers in ways big companies can’t. Embrace it, use it, and let it be the reason people choose you over them. Being small can be your biggest strength. 🌱

5. Failure to Adapt to Market Changes

What’s the Big Deal?

Imagine wearing summer clothes in winter because that’s what you wore last season. Doesn’t make sense, right? Similarly, sticking to old ways in a rapidly changing market can leave your business out in the cold. Here’s why this is a big deal:

  1. Losing Relevance: What worked yesterday might not work tomorrow. If you don’t keep up, your business might start to look outdated.
  2. Missing Opportunities: Change brings new possibilities. If you’re stuck in old ways, you might miss the next big thing.
  3. Customer Expectations Shift: As the market changes, so do people’s wants and needs. If you don’t adapt, you could lose customers to someone who does.

Example: Mary’s Video Rental Store

Remember the days of renting movies on DVDs? Mary’s Video Rental Store was a hotspot in the ’90s, but she didn’t see the shift to streaming services coming. While others adapted, she stuck to DVDs. It’s like sticking to a typewriter in a world of laptops.

More Real-Life Scenarios:
  • Henry’s Camera Shop: Henry sold film cameras but didn’t adapt to the digital age. He missed the wave of new photographers looking for digital solutions.
  • Sara’s Diner: Sara’s menu was popular for years, but when health trends changed, she didn’t adapt her menu. Her once-bustling diner saw fewer regulars.

Actionable Steps: Stay Ahead of the Curve

  1. Keep Learning: Stay updated on trends in your industry. Read blogs, attend conferences, or join online forums. Stay curious!
  2. Listen to Your Customers: They’ll often tell you what they want or need. Keep an ear to the ground, and don’t be afraid to ask for feedback.
  3. Experiment and Innovate: Try new things. Not everything will work, but that’s okay. Experimentation leads to innovation.
  4. Embrace Technology: From social media to new payment methods, technology can help you stay modern and efficient.
  5. Stay True to Your Values: Adapting doesn’t mean losing what makes you special. You can change and still keep your core values.
  6. Consider Professional Guidance: Sometimes, an outside perspective from a consultant or industry expert can help you see things in a new light.

Conclusion: Ride the Waves, Don’t Get Swept Away

Adapting to market changes isn’t about chasing every new trend. It’s about staying relevant and connected with what your customers want and need.

If Mary had embraced the digital age and turned her rental store into a hub for movie lovers, who knows where she’d be today? Don’t be afraid to evolve. Keep what makes you special, embrace what makes you relevant, and never stop learning.

The market will keep changing, and that’s not something to fear.

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6. Dependence on a Single Product or Service

What’s the Big Deal?

Imagine eating the same meal every day. Sure, it might be your favorite, but after a while, you’d want something different. The same goes for a business relying on just one product or service. It’s risky and might limit growth. Here’s why:

  1. Putting All Eggs in One Basket: If something goes wrong with that one product or service, it could spell trouble for the entire business.
  2. Missing Out on New Opportunities: Relying on just one thing could blind you to other chances to grow and diversify.
  3. Customer Needs Change: What if your customers suddenly want something different? If you only have one offering, you might lose them.

Example: Bob’s Burger Joint

Bob’s Burger Joint served the best burger in town, and for years, that’s all they did. When a health trend hit, and people wanted more options, Bob’s was in a pickle (and not the good kind on a burger). It’s like having only one song on your playlist.

More Real-Life Scenarios:
  • Amy’s Art Supplies: Amy only sold paint, but when customers started asking for brushes, canvases, and more, she realized she’d missed out on expanding her offerings.
  • Steve’s Lawn Care: Steve only mowed lawns. When his clients wanted more landscaping services, he had to turn them away.

Actionable Steps: Broaden Your Horizons

  1. Understand Your Customers: What else might they need or want? Listening to them can reveal new opportunities.
  2. Research the Market: Look for gaps in the market that align with your business. Can you fill them?
  3. Start Small: Trying something new doesn’t mean a complete overhaul. Maybe add one new product or service and see how it goes.
  4. Collaborate with Others: If you’re not ready to expand on your own, perhaps you can partner with another business to offer more to your customers.
  5. Monitor Success and Adjust: Keep track of how new products or services are doing, and don’t be afraid to make changes as you learn.
  6. Stay True to Your Brand: Expanding doesn’t mean losing your identity. Keep your core values and brand message as you grow.

Conclusion: Variety is the Spice of Business

Relying on a single product or service is like having a one-note melody; it’s pleasant but can become monotonous. Adding variety and diversifying can turn that melody into a beautiful symphony.

If Bob had added a few healthy options to his menu, he could have kept his burger-loving customers while attracting new ones. Your business, too, can grow and flourish by offering a little more without losing what makes it special.

Remember, variety is not just the spice of life; it’s the spice of business, too. Add some flavor, and watch your business bloom. 🌺

It’s something to embrace. Your adaptability is your superpower. Use it, and you’ll never be left behind. 🌊

Running a small business has been one of the most rewarding and challenging experiences of my life. From the highs of success to the lows of unexpected hurdles, I’ve learned that adaptability, resilience, and a willingness to learn are essential.

I hope that the insights and actionable steps shared in this article resonate with your journey and offer practical guidance. Remember, every challenge is an opportunity in disguise, and you’re never alone in this adventure.

If you find yourself needing more personalized advice or simply want to share your story, please don’t hesitate to reach out to me. Whether it’s a quick question or an in-depth conversation, I’m here for you.

Let’s take on these challenges together and turn your small business dream into a thriving reality. 🌟 Contact me here, and let’s make your business shine!

Written by Jan Vasil

As a CMO at a digital agency The Digital Pug, I'm passionate about SEO and blogging, and I'm always striving to stay ahead of the latest trends in digital marketing. In my spare time, I like to play golf, listen to music, and hang out with my black pug. I take great pride in providing my clients with top-notch marketing strategies to help them achieve their goals.