Thriving Amid Turbulence: Tackling The Top 5 Challenges for SMBs in 2024
The global economy is on course to record its worst half-decade of growth in 30 years, according to the World Bank. This trend could signify the possible advent of a new era of turbulence.
To ensure continued business success in this era of low growth and turbulence, SMBs must focus on near-term challenges before focusing on long-term resilience. Start by identifying and managing your company’s immediate challenges – there’s little benefit to planning a long road trip until you fix the flat tires on the car.
Keep reading to learn the top 5 challenges facing SMBs in 2024 and how to manage them.
Challenge #1: Finding new customers
The challenge to find new customers will intensify in 2024. Acquiring new customers poses significant challenges for SMBs due to limited budgets, lack of brand recognition compared to larger companies, and intense market competition. As SMBs struggle to absorb high operational costs to keep their pricing structures competitive, investments in extensive marketing campaigns are often constrained. The dominance of larger companies in the market, along with their superior marketing resources and expertise, makes it challenging for smaller businesses to stand out.
What To Do:
To help attract new customers, your business needs a compelling selling message promoting your company as an expert in your industry. Optimize your business website for search engines and regularly publish content that potential customers will find valuable. Consider creating a blog to showcase articles and videos demonstrating your expertise, then promote your content via various marketing, social media, and industry-specific channels.
If you have a healthy marketing budget, consider a brand awareness campaign. You may not see an immediate increase in sales from this type of campaign. Still, it can lead to better name recognition and trust among prospective customers if done consistently over time.
Challenge #2: Retaining existing customers
The most efficient source of new business is from existing customers. Whether its new orders or referral business, existing customers can be the best advocates for your products and services. But brand loyalty isn’t always a given – once you’ve attracted a new customer the next challenge is to keep that customer coming back, or at minimum, spreading the good word to promote your company.
What To Do: Adapt a customer-centric strategy to enhance customer satisfaction and loyalty. This approach typically enhances repeat business and positive word-of-mouth referrals. Respond to customer feedback and complaints with first reply times as quickly as possible and focus on providing a positive customer experience.
Also, consider implementing a scorecard program to track key performance indicators (KPIs) related to customer retention.
Challenge #3: Hiring and retaining workers
Securing the right talent in 2024 will present significant challenges for many SMBs. Job openings continue to exceed the number of professionals looking for work, and 51% of employees are now leaving their jobs in the first two years. According to a recent survey of over 1,850 hiring managers, 57% of respondents have plans to introduce new permanent positions in the initial six months of the year, while an additional 39% foresee hiring to fill vacated positions. This means competition for the best workers will likely heat up even more over the next 12 months. Furthermore, a substantial 67% of respondents anticipate including contract workers as a pivotal component of their staffing strategy.
What To Do:
The job market is fiercely competitive! Whether it’s hiring permanent or contract workers, you need to start by clearly understand what employees want and craft an employment offer that meets their expectations. Keep in mind that today, the right work/life balance and improved benefits are key to attracting talent. On the financial front, while the most important part of a job isn’t always money, reports show that today, above-average compensation can be key to attracting qualified candidates. So, be in tune with the market and set salary or hourly wages accordingly.
Company culture also matters: In employment surveys, company culture often ranks above salary in terms of work satisfaction. Over three-quarters of surveyed job seekers say they would consider a company’s culture before applying. And how do you share information about your culture? Well, 59% of job seekers research companies’ websites, social media, and reviews before deciding to apply. So, ensure your brand, mission, and culture are well represented on your company’s website.
Finally, in a highly competitive market for top employees, consider retaining the services of a reputable staffing agency to achieve the best hiring results. Leverage their expertise, networks, and streamlined processes to identify, assess, and secure top talent efficiently.
Challenge #4: Combating cybercrime
Cyber thieves are more active than ever heading into 2024. While large companies are usually the subject of most publicized cybersecurity breaches, small businesses are also more at risk. SMBs typically have weaker security measures, exposing their company and customers to fraudulent activities. Recent data reveals that 95% of cybersecurity incidents at SMBs cost between $826 and $653,587.
What To Do: The first line of defense is implementing a robust cyber security strategy. A comprehensive plan should include the following:
- Regularly updating and patching software
- Employing robust antivirus and anti-malware solutions
- Conducting employee training on cybersecurity best practices
- Implementing strong password policies
- Securing networks with firewalls
- Encrypting sensitive data
- Regularly backing up essential information
Additionally, SMBs should stay informed about the latest cyber threats and consider partnering with cybersecurity experts or services to fortify their defenses and promptly respond to emerging risks.
Challenge #5: Limited access to financing
Many SMBs have struggled to keep their doors open amid the economic upheavals that followed the pandemic. As a result, nearly half of SMBs are now looking to solidify their finances to meet financial obligations and support operations amidst an inflationary market environment. However, access to conventional business financing is limited as banks tighten lending standards.
What To Do: As the conventional lending market contracts, SMBs are turning to non-bank lenders for faster, easier-to-manage access to credit.
Alternative lenders use advanced technology to source the untapped collateral strengths of SMBs with varying performance levels and credit records. By accessing vast databases and assessing thousands of credit-related data points, these lenders can qualify borrowers by leveraging risk-mitigating strengths that banks typically overlook.
Offering various flexible funding options such as asset-based lending and invoice financing, the best alternative lenders provide fast access to working capital with funding terms tailored to meet the needs of the borrowing company. Experienced alternative lenders provide expertise and innovative solutions to overcome financial difficulties and maximize credit availability.
Look for a reputable alternative lender experience in your industry to acquire the best service, rates, and the most money to support your business success.
In 2024, SMBs face formidable challenges, including finding and retaining customers, navigating the competitive labor market, and defending against the threat of rising cybercrime. SMBs are urged to implement adaptive strategies to foster strong customer relationships (with both new and returning customers), strengthen hiring and retention programs, and prioritize cybersecurity measures.
Overcoming the fifth top challenge listed above is recommended as the first step in supporting these other four adaptive strategies. Acquiring access to business financing helps solidify the company’s financial health. It provides the financial resources to tackle other challenges and thrive amidst the turbulence of uncertainty and low growth.
SMBs must overcome near-term challenges before focusing on long-term resilience to thrive and grow over the long haul.
- As we enter 2024, uncertainty has intensified signifying the possible advent of a new era of turbulence.
- To ensure business success in an era of low growth and turbulence, SMBs must focus on near-term challenges before focusing on long-term resilience.
- Learn how to manage the top 5 challenges facing SMBs in 2024:
- Finding new customers
- Retaining existing customers
- Hiring and retaining workers
- Combating cybercrime
- Limited access to financing
Since 2006, eCapital has been on a mission to change the way small to medium sized businesses access the funding they need to reach their goals. We know that to survive and thrive, businesses need financial flexibility to quickly respond to challenges and take advantage of opportunities, all in real time. Companies today need innovation guided by experience to unlock the potential of their assets to give better, faster access to the capital they require.
We’ve answered the call and have built a team of over 600 experts in asset evaluation, batch processing, customer support and fintech solutions. Together, we have created a funding model that features rapid approvals and processing, 24/7 access to funds and the freedom to use the money wherever and whenever it’s needed. This is the future of business funding, and it’s available today, at eCapital.