Five Powerful Solutions for Small Business Challenges.

As we move toward the end of the year, it is a great time for the small business owner or entrepreneur to reflect on their overall business challenges. Reflection provides significant insights toward improving your business results and avoiding repeated mistakes. It is also a good point to think about what next year will bring for their customers, employees and offerings to kickstart healthy growth.  

In this post, I will unpack five common small business challenges and five practical solutions using Design Thinking methods to help in areas ranging from customer acquisition to growth and strategy. While there is a myriad of challenges a small business can face, the five we explore here were identified multiple times from respectable publications. These sources included the Small Business Administration, the Society of Human Resource Management, Harvard Business Review and Forbes. One large challenge I don’t cover is Federal or State Regulations, as this is not my area of expertise. 

1. Finding Customers 

Even the most successful companies have people working every day to find new customers. But for small businesses that are not a household name, finding customers can be particularly difficult. For example, there are many channels you can choose to focus on, but how do you know what to prioritize and where to allocate your sales and marketing resources? 

SOLUTION: 

You can start by drafting up a buyer persona. This is a visual representation of what your target customers look like for 2020. What do they do, where do they spend time online or with friends and family? A buyer persona can be as graphical as a large poster with pictures and icons that form a functional infographic. Or it can be as simple as a list with key attributes, activities, demographics and other details in a spreadsheet. Creating detailed and specific personas can dramatically improve your business results. Once you've built your buyer personas, you can start creating content with messages about products and services that they care about. 

TIP: Separate your customers into three categories.  

1. The Ideal Customer: This represents the customer who sits in your business sweet spot by returning to your store, your site or services. You probably have one or two customers already you absolutely adore and would model your new customers after. This is a good place to start work on the Ideal Customer solution.  
2. Customers to Avoid: This could be a list of people who might not benefit from your offerings. More pointedly, these are customers who waste your time. Creating a list of these pseudo customers help you to identify early when to exit the conversation or sales pitch.  
3. Dream Customers: These are different than ideal customers in that, they are long-term relationships that require additional investment on your part. Imagine landing a customer like Amazon, P&G or any other established brand. You may not necessarily attain this in 2020 but you should always create stretch goals for your business.  

2. Hiring and Retaining Talented People 

Hiring is one of the biggest challenges for small businesses, especially since owners often feel under-resourced to begin with. Hiring new employees is a complex process and has an average cost of onboarding at $4,000 per new employee for most companies, according to the Society for Human Resource Management. Additionally, if you don't hire well, employee turnover can be more costly. In a relatively tight U.S. labor market, businesses are fighting to recruit the best candidates and talent. It is becoming especially important to invest in existing employees to reduce turnover. It costs far less to retain an employee than to hire one, and turnover can drain a company dry through lost productivity, strain on other employees and the costs of recruitment and training. 

SOLUTION: 

Because of the high costs of hiring correctly, it's important to invest a significant amount of time in the hiring process. Don’t settle for good employees when you can find great ones, even if it takes longer. It's the great employees that will help your company get to the next level. Start by creating employee personas for your job candidates. Just like your Buyer Personas, your employee personas can take on similar attributes. However, these should be different for each new role that you’re hiring for but share underlying traits around your company culture. 

TIP: Start With Three Employee Types. 

• Identify 5 ideal employees - This is similar to the Buyer Persona process but with a focus on role, experience and soft skills 
• Identify 5 employee types to avoid - Here again, this is similar to Customers to Avoid but focus on personality traits rather than just experience. Identify people you know won’t fit in with your company culture. 
• Identify 5 employees you think are out of reach - Identify big name employees like Elon Musk or Sarah Blakely to work with. These are stretch goals but helps you and your team to get out of normal hiring practices. One practical approach may be hiring a social media influencer. 

Visually Group Your Employees 

• Group and cluster all identified employees by roles (e.g. HR, Sales, etc.) and personality traits using colored sticky notes and any drawing surface. Put this in a central place to review frequently with your hiring team. 

• Employee Persona - Articulate what the ideal candidate looks like, what they do, where they spend their time in a visual format similar to the Buyer Persona. I encourage you to be more visual than being in list-making mode. The act of drawing on sticky notes and visually organizing these helps your brain keep track. Remember, these are people whom you are going to spend a lot of time with at work. So, take it slow here. 

3. Marketing: Brand Awareness 

It can sometimes appear today's biggest brands have popped up out of nowhere. Lyft. AirBnB. Nest. How did they become a household name? How did they grow that quickly? Can your business grow like that, too? They each developed strategies that focused on understanding the customer experience. Here is how to get started. 

SOLUTION: 

First, you want to consider ways to improve your brand awareness by generating bold ideas. No safe ideas and no “business-as-usual" approaches. Using a structured brainstorming technique called Creative Matrix, many new and unusual ideas can be formed. Next, you and your team will determine which ideas possess the most impact by voting. This list can provide you the roadmap toward a new marketing strategy. 

TIPS: 

• Creative Matrix is a visual representation of a grid where the columns represent what and where the client interactions might be with your business and the rows represent what enables or triggers those interactions. 

Make It Real – The Importance / Difficulty Matrix 

• Each member will rank each idea by relative importance or impact. 
• Next, the members will now rank them on relative time, difficulty or cost. 

4. Lead Generation 

According to Hubspot.com, Only 1 in 10 marketers feel their lead generation campaigns are effective. But generating leads that are both high quantity and high quality is a marketing team's most important objective. A successful lead generation engine is what turns website visitors into prospective customers and keeps the funnel full of sales prospects. 

SOLUTION: 

Your website is arguably the most important tool you have for turning prospects into customers. To make the lead generation process work for your business, you need to first optimize your existing website for leads.  Look through your website and ask yourself: 

What’s Working? What’s Not? What Needs Improvement? 

• Used to identify positive, negative, and potential categories for action and improvements. This could be a simple list or multi-colored sticky notes that capture each category item. For example, green sticky notes could be positive or good things. Blue is all the negative things and yellow represents areas of improvement.

Use the “Importance / Difficulty Matrix” Again! 

• This will be used to map out priority items to fix on the website.  

5. Founder Dependence 

This form of dependence is often caused by the founder being unable to let go of certain decisions and responsibilities as the business grows. Meeting this challenge is easy in theory. In practice, however, this is a big stumbling block for founders because it usually involves compromising on the quality of work being done until the person doing the work learns the founder’s approach. 

SOLUTION:

This will have a focus on discovering ways to map the founder’s workday experience. Working as a group, you will map the experience of the founder, including the people, places, systems and information they interact with over time. 

TIPS: Create an Experience Diagram.

• Begin identifying typical experiences the founder has within the organization across five dimensions: 

1. People – Identify people the founder interacts with the most.
2. Places – Identify three key places the founder works the most.
3. Systems – List all the processes, policies and operations the founder manages or interacts with the most. 
4. Information – Identify the key pieces of information the founder needs to obtain. Is this email? Is this CRM? Is this Accounting? 
5. Emotions – For each of the four areas listed above, note how the founder is feeling when interacting. Is the founder happy or frustrated or concerned?

Reflect and Improve 

• Using the emotions you captured, reflect on those within a typical experience to find responsibility shifts.  The items that cause the most frustration could be a good place to had over the reins. It is also a good place to brainstorm on improvements. Whereas, the happy parts may be where the founder excels and should continue a reasonable amount responsibility.

BONUS: Balancing Growth and Quality 

Even when a business is not founder-dependent, there comes a time when the issues from growth seem to outweigh the benefits. Whether you offer a service or a product, at some point a business must sacrifice in order to scale. Having the capability to personally manage every client relationship or inspect every product will not be feasible. There is significant middle ground between shoddy work and an unhealthy obsession with quality. Therefore, it is up to the business owner to navigate the company's processes towards a compromise that allows scale without hurting the brand. 

SOLUTION: Assess and Execute.

As a business owner, get your most trusted employees and advisers together. You can start by reflecting on the business' current state with this team. Start with reflecting on positives, negatives, and untapped opportunities within a typical business day, week, quarter, or what makes sense for the group. You can explore products, processes, programs, or policies. Next, you will look for patterns and insights by clustering like items together to develop potential solutions, similar to the clustering in the Employee Persona. Then, get to work prioritizing, as a group using the Importance / Difficulty Matrix as described above. 

WRAP UP

Where do you see putting some of these suggestions in action? What are additional challenges your business face? Leave your feedback and comments to expand the discussion and to hear from fellow business owners.

To learn more visit us at aperturecreative.net. The details included here are based on my 20 years’ experience in business consulting, product design and leading creative projects. I am also a certified Design Thinking Practitioner, Facilitator and Instructor, as recognized by The Luma Institute. Whenever possible I will quote or cite direct sources.