By Raj Sond, general manager at First Data Merchant Solutions
Looking as far back as the time of the Napoleonic wars, Britain has always been recognised for its commercial power, deriving in part from its army of small businesses. Cynically described as a “nation of shopkeepers” by Napoleon, the country has long depended on entrepreneurs driving business and supporting consumption. These days, little has changed, although economic headwinds over the past several years have made life tough for entrepreneurial individuals. The government has recognised this, and is increasingly pushing for banks and other financial institutions to support new businesses and enable them to grow and thrive.
While the government’s efforts are laudable, in many cases, its campaigns to foster entrepreneurship fail to provide a realistic insight into the tasks involved with running a business. Once the buzz and excitement of launching a new venture has worn off, the day-to-day grind of running a business can come as a real shock.
We’ve worked with many new businesses across Britain, and have seen some thrive and grow, while others have struggled to take off. Below, we’ve compiled our top tips, looking at the aspects that business owners must focus on to succeed.
Running out of an essential item, just as it becomes popular with customers, can be disastrous for a small business. Entrepreneurs must train their staff to keep a precise log of transactions, to track which items have been sold and need replacing. If small businesses can track these in real time, they can even use the data to assess which products are proving most popular and when – giving them insight into when and how much to restock. This data can also enable retailers to make critical stock decisions, choosing which products to discontinue, and which lines to grow.
Small business owners tend to benefit from a lot of flexibility with their staff, as they employ temporary and part-time workers. With a high staff-turnover, however, this can prove difficult to manage and can have a damaging impact on the business. It is essential for small business owners to take employee and payroll management seriously, as this will also be under scrutiny by HMRC, with a risk of stiff fines for companies that don’t comply with tax and employment regulations.
The days of small businesses holding court at the heart of the high street are long gone, and with large retailers employing expensive marketing strategies and customer relationship management tools, small, independent retailers need to fight to attract customers and then maintain their loyalty. By keeping track of their customers’ spending habits, small businesses can reward loyalty with targeted campaigns, and encourage spending on profitable products or services.
With new payment solutions developing on a seemingly monthly basis, it can be hard for small business to keep up. Some bigger retailers have been investing in contactless payments – does this mean SMEs should too? Committing to one payment solution can be a restrictive and costly exercise for small businesses – particularly if consumers do not latch onto the trend. Small businesses would benefit from open payments platforms or registers, which allow them to add-on additional payments features as they become popular with customers.
Having clear expectations of the challenges ahead when entrepreneurs set out, is one of the ways of ensuring that small businesses thrive. While running a business can be thrilling and rewarding, it is also hard work, some of which people are unprepared for. Just because someone has a passion and a skill for a particular service, they will not necessarily prove to be a strong business person. This requires the ability to take care of accounts, manage stock issues and product calculations, hire, train and direct staff and create a business that appeals to and engages with customers. With the right planning, tools and mindset, would-be business owners can prepare for these challenges, allowing them to focus on the passion that inspired them to launch a business in the first place.