Author: Matthew Feierstein, President of EverCommerce
Wake up. Drive to work. Put in your 8 hours. Drive home and enjoy your evening. That used to be the goal when it came to entering the professional world. But the typical 9-5 and other standard career paths are not as appealing as they once were, especially to younger generations.
Many Gen Zers are looking for something different. Namely, they want to close the door to the traditional corporate world and become their own boss.
In fact, according to Zen Business research, 93% of the young professionals in this generation have taken steps to explore business ownership options, and 75% plan to pursue an entrepreneurial career.
Of course, business ownership comes with its own unique set of challenges. For Gen Z, these issues are different from what previous generations had to grapple with.
For example, economic factors like inflation are a major concern. The cost and quality of labor can also be roadblocks to success. Plus, new small and medium-sized businesses (SMBs) are being hit with increasing taxes. They have to deal with more government regulations, too.
The list of obstacles goes on. Gen Z-led SMBs need to learn how to adapt to meet these challenges.
Let’s take a closer look at these challenges and their impact on rising Gen Z entrepreneurs, explore solutions from existing SMB owners and review the insights gained from hundreds of service-based small business owners.
Challenges Today’s SMBs Need to Overcome
EverCommerce surveyed service-based SMBs ahead of National Small Business Week. The survey results highlighted three primary challenges faced by existing small businesses.
- Finding new customers. 38% of service-based businesses had difficulty finding new clients.
- Hiring skilled workers. 36% of owners struggle to hire quality workers. This challenge is especially evident for service-based businesses. They rely on workers with the skills to complete service jobs.
- Negotiating financial challenges. 35% of SMBs have financial difficulties. They struggle to maintain the cash flow needed for a successful operation.
Gen Z-led startups need to confront these issues. They need to account for the other general challenges all SMBs face, as well.
Insights for Overcoming Small Business Challenges
The responses to the EverCommerce survey from SMB owners highlighted real-life methods being used to achieve business success.
Here are the most useful takeaways from their answers:
Customer Acquisition
SMB owners found new customers through three different methods.
The most effective source of new clientele remains personal referrals. 70% of owners listed this as the most effective way to build their customer base.
Social media also proved to be an impactful acquisition tool, with 57% of owners connecting with potential customers on social platforms.
Search engine optimization (SEO) was the final key customer acquisition method for survey respondents. 39% of owners listed online search as vital to their success.
What can new and aspiring small business owners take away from these insights?
- Asking for referrals from existing customers is a great way to expand your customer base.
- Taking steps to connect and engage with your target audience on social platforms is likely to pay off with new prospects and customers.
- A strategically optimized website and completed Google Business Profile are crucial for reaching online searchers seeking services in your area.
Growth Drivers
Another valuable insight discovered in the survey was that discount programs can drive and sustain growth. Forty-seven percent of business owners said such programs were beneficial.
Coupons or discounts allow new customers to try your services for a lower cost. Plus, price breaks for regular clients can help with customer retention. Examples might include discounted rates for prepaying monthly or quarterly.
Business promotion timing is also important. The survey found that 37% of owners earned the most revenue at the beginning of summer. Only 29% were consistently busy throughout the year.
Most organizations should run promotions outside of the busy season – this ensures that the business stays busy all year round and helps you capitalize on your promotional investments.
Service and Customer Experience
Loyal customers provide ongoing business and high-value referrals. You can build these relationships with good customer service.
The surveyed SMB owners offered insights on how to boost customer loyalty.
Sixty-seven percent of owners say direct communication and personalized service are critical as they both impact the customer experience. This could include following up with customers after service. Or, it could involve unobtrusive texts or emails about promotions or new services.
Convenience and warm, friendly interactions are also important for a positive customer experience.
These qualities are the hallmarks of small, local businesses. Easy, positive, and engaging customer experiences set you apart from corporate or franchise competitors.
Tips to Get Started with Your Small Business
Opening a small business requires capital and commitment. It takes time to plan. But you don’t have to wait to get started.
Here are some tips you can act on right now to take the first step toward setting up your small business for success:
- Define your business. The first step to establishing a business is, of course, to choose a business type. Define your passions and skills. Then, brainstorm business ideas around them.
- Determine your purpose. Service-based businesses need to meet a specific need. Define a common problem that people in your area have. Then, build your business idea around solving it.
- Research existing businesses. Look at existing businesses in your chosen sector. Decide how your business will be unique from them. Your unique selling proposition is what will set you apart in the industry.
- Refine these small business ideas. After you take the steps above, you will have a base on which to make more concrete plans. The insights in this article can help lay the groundwork for the success of your small business.
Those with a well-thought-out business plan and the strong ability to adapt to any situation will have the most success when it comes to opening a small business.