Detecting the Problems in Businesses and Solving Them: Branding, Security, Finance Management
In the everyday craziness of running a company, entrepreneurs often fail to take a step back to analyze and identify some key pressing issues hurting their business.
Branding, security, and finance management are critical for any growing business. Problems surrounding these key areas can have a snowball effect on the entire company.
Follow this article to learn how to address these problems and ensure these three key areas of your business contribute rather than take away from its value.
Detecting problems in your business
Identifying problems early and often is vital to being a strong entrepreneur, especially if a company is losing money. Unaddressed issues can stockpile over time and stunt growth, no matter how minor they seem.
Detecting problems is a skill that takes experience and knowledge to develop, and it starts with asking a lot of questions. That doesn’t mean questioning every little thing that goes on in the business or its employees. But, where a certain issue arises, it’s essential to ask yourself or others why it happened.
For example, a customer orders something online, and delivery takes a week longer than promised. The customer then complains and promises never to shop from you again. Learning from these moments is what separates successful businesses from failed ones.
Instead of agonizing over a mistake like that, ask yourself why it happened. What can you do to prevent it from happening again? Was it a problem with inventory, the delivery carrier, or something else?
Go beneath the surface and try to identify the root cause of the issue. If multiple people are returning your product, it’s a good sign that it’s time to go back to the drawing board and make improvements. You can even go a step further and ask customers directly where the issue is. Communicate not only with customers but with everyone constantly exposed to your business, including employees, vendors, and even competitors.
Once you identify the issue, it’s best to act immediately. Wasting time and waiting for a problem to go away or fix itself will only make it worse.
Common problems that lead to brand destruction
Depending on the industry, protecting the integrity of your brand can be the difference between success and failure. A strong brand gives you a competitive edge and a set of loyal customers that are essential for long-term growth.
Brand problems usually arise when there’s no clear direction regarding the target audience. That’s why creating brand personas and visualizing the ideal customer is something everyone learns in business school.
Another problem with many brands is inconsistency. Establish clear brand guidelines regarding colors, fonts, and logos. That doesn’t mean you can’t switch up or experiment with messaging, but the core message should stay the same, and so should the overall brand identity.
Problems may also arise if you constantly cut the advertising budget to save money in difficult times. Henry Ford once said, “A man who stops advertising to save money is like a man who stops the clock to save time.”
Advertising will keep your brand afloat and may put you ahead of competitors that are cutting costs. Cutting the advertising budget is a short-term fix that won’t make much difference, but will end up hurting your growth over the long run.
Poor customer service is also a problem that leads to brand destruction. Customers shouldn’t have to go through five people to have one question answered. Customer service should be quick and organized, leaving an excellent lasting impression on customers and prospects.
But, the root cause of poor customer service may not be that you’re uncaring. If you have a social presence on every platform, customers will inbox you wherever they can. Make sure you or other staff are checking on customer inquiries on these platforms. If you can’t manage, limiting your presence to platforms that bring the most engagement is best.
The role security plays in business growth
Like a house, a business without a strong foundation is set up for failure. A strong business foundation includes:
- A solid business plan.
- Efficient infrastructure.
- Security measures to protect data integrity and critical systems infrastructure.
Businesses lose $400 billion annually due to poor security. Some companies never recover from a cyber incident as they cannot cover the costs. Even if a business doesn’t suffer significant financial consequences after a breach, its reputation will deteriorate, slowing down growth.
When it comes to security, you have to spend money to save money. In the world of budgeting, that can be a tough pill to swallow. Yet, ignoring this fact is what leads to security-related problems in the first place.
In an attempt to save money, entrepreneurs may choose a cheaper, less secure software or online service. Regardless of business size, these decisions will come back to bite you sooner or later.
With limited resources in the early stages of a business, it’s understandable if you’re forced to compromise on some security features. But, as you grow, your security investments and infrastructure should develop along the way.
Essential steps to improve security posture
Improving your security posture doesn’t mean spending vast portions of your IT budget on sophisticated tools or personnel. It can be done by incorporating a few simple, yet essential changes, such as:
Performing regular updates to company systems
Keeping software updated is a best practice that many security professionals preach – and for a good reason. Keeping outdated software is like leaving your door open at night. Maybe a thief won’t see that it’s open, but if they do, you better believe they will take a look inside.
With hackers, it’s only a matter of time before they identify a vulnerability in your infrastructure resulting from outdated software. Software updates and patches contain critical security fixes and improvements you need to operate safely.
Develop a strict update schedule all employees are required to follow. Enabling automatic updates is also highly recommended.
Using a password manager
How many times have you had to share credentials with an employee? It’s a scenario that happens almost every day. For larger businesses with dozens of employees, managing passwords for all their accounts can become a hassle. An advanced password manager makes storing and sharing passwords significantly easier.
Not to mention the other great features in password managers, like the ability to generate impenetrable passwords. Strong passwords for all company accounts make a huge difference in your cyber posture. If all employees use a password manager, they are far less likely to fall into old habits of setting short and easy-to-remember passwords.
Third-party risk management
Regardless of business size, you probably work with several, if not many, third-party vendors for various functionalities. Many security problems can arise from these vendors, especially if their cybersecurity practices are not up to par.
It’s not unusual for companies to suffer severe data loss and reputational damage because one of their vendors got hacked.
Staying on top of your vendors isn’t easy, but it’s necessary if you want to minimize risk. Before even getting into a working relationship with other entities, send out security questionnaires and make sure they meet your standards.
Employee training is the best bang for your buck if you’re ready to invest big on security. 82% of cyberattacks are a result of human error. With that in mind, increasing the security awareness across your employees will significantly reduce your risk exposure.
For employee training to be effective, it has to be a consistent part of your cyber defense program. It can come in the form of a simple security manual or meetings where you outline your expectations for secure handling of company resources.
What about finances?
“Running the numbers” is the first thing entrepreneurs do before getting into a business venture. If the numbers don’t add up, most will give up on the idea until they figure out a better way to execute it.
Yet, when the business starts heading in the right direction, many entrepreneurs forget to keep their finances under a tight leash. Even if it doesn’t seem like a financial issue at first, good accounting can shine a light on areas of your business that are underperforming.
Break-even analysis is the basic calculation every business needs to know each month. If you know that you have to sell 1.000 units each month to be profitable, but you only produced an average of 750 over the last few months, you’ve identified a production problem that needs addressing.
Trend analysis is another metric that clearly shows how the business performs over time. It’s a solid indicator of when production, growth, or other areas need to improve for long-term growth.
Competitor analysis and industry knowledge can also help you determine areas of improvement. Even if you’re growing, you may learn that your competitors and industry are growing at an ever more extensive rate and scale. That clearly indicates that something is blocking your business from achieving the same success.
Common financial problems for businesses
Getting an excessive debt
Entrepreneurs can be a bit too trigger-happy to take on debt, especially early in the business cycle. Unfortunately, there is a thing such as too much debt, so you have to be careful. Debt can create all sorts of problems, such as a negative cash flow limiting investments or even challenges with basic costs like wages or production.
Always look for areas to reduce costs (remember, don’t go straight to advertising). Shrinking your workforce is an unpopular yet sometimes necessary measure. Selling unused equipment or leasing property is also an attractive solution.
Neglecting necessary reporting
Poor bookkeeping will not only get you in trouble with auditors but will negatively affect all financial budgeting. Accurate financial reports are necessary to fill out tax forms.
You can create reports based on receipts and data pulled from spreadsheets or use an automated solution. Most modern businesses go with the latter as it’s cheap and saves time. When dealing with these sensitive reports, consulting a bookkeeper is highly recommended, especially when the government is involved (for taxes).
Not having a budget to cover unforeseen expenses
One financial problem you have little control over is unforeseen expenses. Industries are constantly changing, and so is the socio-economic climate. A crisis may come without any warning or explanation.
That’s why building up a cash reserve for rainy days is a smart solution that keeps you afloat when unforeseen expenses start biting your budget. You can do this when things are going well, so you don’t have to take on debt when the bad times inevitably come.
Keep current with technology
Whether you like it or not, technology is an inevitable part of building a successful business. Many of the problems entrepreneurs face involve efficiency, which is exactly where technology has transformed the business world. Thanks to technological advancements, tasks that used to take hours are now done in seconds.
You must keep up with technology, as it will help you solve problems and increase efficiency across the board.
The most basic way technology has transformed businesses is how they reach and communicate with customers. It’s now easier than ever to connect with customers, learn from them, and provide them a good experience.
Let’s see some examples of how technology can help in the three areas discussed in this article:
- Branding: Latest technology is helping businesses build their brands in 24-hour support, artificial intelligence and data analytics, tools for delivering exceptional customer experiences.
- Security: The cloud has completely transformed the way businesses store critical data while secure password managers improve the overall security.
- Finance management: Accounting software and budgeting tools have made it significantly easier for companies to measure their finances and deliver mandatory reports.
Problems in business are inevitable and occur pretty much daily. Identifying them is a full-time job that requires attention to detail and excellent knowledge of the inner workings of your business and the industry it operates in.
Problems can arise in all areas of the business. Security problems are particularly relevant today with the rise in cybercrime. Lack of due diligence regarding finances can bring lots of headaches in the long term. Speaking of long-term, addressing branding challenges is essential for successful growth.