Top 10 Business Challenges to Watch and How to Overcome Them

The events of 2020 influenced all industries and brought new business challenges that companies had to overcome. The COVID-19 pandemic disrupted plans of numerous companies and forced businesses to take urgent measures. According to McKinsey & Company, the average share of customer digital interactions grew from 36% to 58% between December 2019 and July 2020. This tendency didn’t go unnoticed and all companies ventured into digital space. Consequently, the competition in every niche became extremely high.

Apart from delivering a quality product or services to retain customers, your company has to be agile and navigate through market tendencies. Kim Huffman, VP of global IT in Elastic shared her vision on the situation: “2020 taught us that to be competitive, we must be agile and able to respond quickly to changing market conditions. In 2021, my team and I will look to drive digital business model innovation that focuses on speed, flexibility, and agility.”

Coping with market competition and driving your company’s revenue, requires you to prepare for business challenges ahead and understand how you can overcome them. In this article, OpenGeeksLab will navigate you through the biggest business challenges and explain how you can turn them into growth opportunities. Let’s roll.

How COVID-19 Influenced Businesses?

During the pandemic, businesses and governments worldwide faced the same business challenge: keeping our economy up and running while all consumers are locked in their housings. Companies had no other choice but to adapt to a new reality. The COVID-19 crisis forced virtually all industries to reshape their business models.

Let’s take a look at the hospitality industry, which accounts for 10% of the global GDP. EHL Insights stated that in 2020 the global number of tourists decreased by 30% compared to 2019. While being a huge troublemaker that left 650,000 hospitality workforce unemployed and created severe challenges for small business owners, COVID-19 also became a huge accelerant of digital transformation in this niche. To ensure visitors’ safety, hotel chains provided a mobile check-in which completely eliminated front desk queues. Besides, clients can order meals and additional room services via concierge apps. Hotel booking apps help clients customize their stay before even getting to a hotel. By the way, you can take a look at GOeureka, a Blockchain-based platform shaping the future of online hotel booking, developed by our team.

Another industry that took the COVID-19 heat was food services. Recent research by Deloitte showed that 42% more people (in comparison with pre-COVID times) will cook at home rather than going to restaurants. Besides, 20% more respondents will order food for takeout or deliveries.This fact may become one of the biggest challenges for small business owners. Therefore, this niche has to adapt to new business challenges and provide takeaway abilities.

Additionally, the food delivery market is expected to grow up to $154.3 billion compared to $107.44 billion in 2019. During a transformation, some restaurants launched their own delivery services, while others cooperated with intermediaries like UberEats, GrubHub, and so on to overcome new business challenges. Besides, local farm shops didn’t experience small business challenges like other niches. They became popular among consumers, as large retail stores lacked supplies.

There are a lot more niches that can be discussed. The healthcare industry went digital and applied telehealth solutions for remote examining patients and prescribing medicines. Therefore, the telehealth market size is expected to reach $559.52 billion by 2027 with a CAGR of 25.2% during the forecast period. Now’s a good time to read about Doctro.app, which was crafted by our experts to help doctors and patients stay connected in the age of pandemic.

The educational industry also faced business challenges with on-site education. As reported by UNESCO, 82,1% of enrolled students were affected by school closures at the peak of the pandemic. That’s why educational institutions’ management went remote to not interrupt the learning process. Plus, online educational platforms gained unprecedented user base growth. For example, Coursera reports on 59 million course enrollments representing 248% year-to-year growth.

At a first glance, it may seem that COVID-19 brought more growth opportunities than harm. However, what distinguishes companies from our example is perfect management that helped them adapt rapidly. Let’s not forget about companies that went bankrupt because they couldn’t adjust to this situation and all problems of small businesses that haven’t been solved yet.

To help you avoid their mistakes, we’ve made in-depth research and compiled a list of possible business challenges in 2021-2022. Let’s examine all problems of entrepreneurship closely and find a solution to overcome them.

Business Challenges Ambushing Entrepreneurs

Even the toughest challenge can be turned in your favor with a careful strategy and well-advanced preparation. Get a closer look at our list to be informed about upcoming business challenges.

1. Keeping up With Industry Trends

As you already understand, COVID-19 influenced every single niche and increased the competition across all industries. The pandemic left companies rethinking their business strategies and finding new means of revenue generation. Such a rapid transformation brings prosperity to ones open for changes and leaves conservative and overthinking entrepreneurs behind.

Let’s examine Spotify’s successful case during the pandemic. When using a free plan, users listen to advertisements. Spotify focused on this revenue model because of a large free user base. However, when the COVID-19 struck, advertisers had to cut their budgets, and this model failed to deliver desired results. That’s why Spotify changed its vector towards paid podcast subscriptions. Paid podcasts on the pretext of a mental health partner during isolation quickly raised an audience and attracted celebrities that provide content. Eventually, this strategy became profitable and warmly welcomed by Spotify’s user base.

2. Coping With Market Competition

Each and every company is thinking of how to deliver a quality product and provide first-class customer service to retain existing customers and achieve user base growth. That’s why it’s crucial to keep an eye on your competitors and industry leaders. Check on their new services, marketing strategies, and reviews from their clients. This information sheds more light on rivals’ revenue sources and explains how they obtain clients’ loyalty.

Unfortunately, sometimes you realize that you can’t compete in your current market. In fact, it’s not too much of a problem compared to other challenges of entrepreneurship. You can easily promote your product to other markets. We’re not suggesting you switch from your current industry to a completely new one. Instead, you can aim at a new target audience.

Telehealth became a niche that experienced an enormous rise in popularity during COVID-19. Apart from helping patients, companies needed to figure out how to stay competitive in a booming market. Plushcare, a service that helps companies find doctors online, experienced a 70% rise in users. To retain their audience, Plushcare decided to launch at-home COVID-19 tests and coronavirus risk assessments that were neatly tied with their telehealth services. Such a pivot in Plushcare’s business strategy helped it to overcome one of the biggest business challenges — retaining an audience in an oversaturated market.

3. Digital Adoption

In today’s world digitalization could not be more relevant for companies. The pandemic compressed several years of digital transformation processes into just several months. All industries, ranging from automotive to fashion turned digital for a number of reasons. One of the major ones is the clients’ outreach. Mobile apps and websites became high-value distribution channels for companies around the world. In retail, for example, e-commerce sales account for $4.5 trillion with global retail market size of $25 trillion.

However, digitalization is an intricate and time-consuming process. One of the biggest business challenges here is realizing how you can provide value for your customers over the Internet. You should establish a brand presence in the digital space, adjust marketing campaigns, create an efficient software solution that meets your customers’ needs, and much more. Obviously, there’s no unified digitalization approach at all. The whole strategy revolves around your business needs.

Still, the main advice on overcoming this business challenge is to take software development seriously. It’s impossible to jury rig a software product that solves buyer problems and works perfectly. Software development life cycle includes too many variables and you can’t handle them on your own. So, when thinking of app or website development, it’s better to delegate this process to a software development company with proven expertise in your niche.

4. Automating Business Processes

Business processes automation (BPA) helps companies eliminate repeatable day-by-day tasks. BPA’s main goal is to accelerate employees’ workflow and allow more time for higher priority tasks. Today, organizations automate various activities like hiring candidates, data transformation, marketing campaigns, accounting, and more. Streamlining routine operations solves one of the biggest problems in business. It removes possible mistakes caused by the human factor.

When thinking of BPA, companies decide between two options. The first one implies hiring a third-party vendor which integrates their solution with your business processes. This approach is highly controversial. On the one hand, you get a painless solution to your business challenges. Vendors usually offer full-cycle support which includes dedicated managers that set up software for you and instruct your workforce on how to use it effectively. Integration speed is the major benefit of third-party platforms.

On the other hand, these solutions often have strict limitations and do not necessarily meet your needs. Even if you want to expand the opportunities of this product, a pre-made software fine-tuning may cost you a fortune. If you don’t tolerate such trade-offs, a second option will be your choice.

Custom BPA systems are tailored to your business requirements. Having analyzed all routine processes in your company, you can draw up a comprehensive feature list and pass it to a software development company. Later on, engineers create your software from scratch that solves your particular business challenges. With this approach, you get exactly what you need. Plus, you shouldn’t pay yearly fees as with third parties. However, custom software services cost a lot and increase the time to value.

5. Data Analysis

For the past decade, data has become one of the most valuable resources in the world that solves a range of business challenges. With data science, enterprises gained access to new insights on customer behavior, trending products, and improved decision-making processes. For example, Airbnb created a data-based algorithm capable of predicting the outcomes of an action or event that happens inside the company.

Additionally, companies experienced a lack of storage for their data. Therefore, cloud infrastructures replace conventional on-premise architecture. Sooner or later, those who don’t gather data will fall behind their competitors. Companies already create cloud-oriented startup aggregators. For example, Snowflake Startup Challenge brings together startups that build applications based on the Snowflake Data Cloud.

To overcome this business challenge you should utilize proper tools. The market offers powerful business intelligence tools that extract valuable insights from your raw data. In combination with a custom ETL (extract, transform, load) system, you’ll get a full-fledged data pipeline for your marketing or business analysis needs. All you need is a group of data scientists that will get the value out of these insights.

6. Modernizing Legacy Systems

In plain language, legacy software is an outdated system that is currently in use by the company. Basically, it meets all primary requirements and handles the initial task. However, such a system may turn into a tough business challenge. The first and foremost — legacy software destroys software scalability. The reason lies in an outdated tech stack. The system created a decade ago can’t be supported or maintained with up-to-date tools. On the other hand, hiring developers that work with obsolete tools is a time-consuming and not very promising idea in terms of today’s IT market.

Some companies address this business challenge by adding new software modules created with modern tools. However, there is a high probability that a stockpile of modules made with completely different technologies will cause a global system malfunction. Not to mention the fact that these systems require a lot more money than conventional software would.

To solve similar problems in business you should modernize your entire legacy system. Even though it requires some time and finances, you’ll gain more than you lose. After an upgrade the performance of your software will rise drastically, growing your workforce efficiency and making a system more secure and agile.

7. Cybersecurity

Enterprise-level companies and small businesses become a target for hackers and scammers. With increased volumes of users’ personal data comes more risks of data leaks from neglected vulnerabilities. In 2021, cybersecurity is one of the main business challenges that should be treated with an utmost seriousness.

So, what exactly should you watch out for? Here are three main threats for the immediate future:

• Ransomware and phishing. During the last year, ransomware constituted more than a quarter of the total cyberattacks reported by IBM Security’s X-Force. Hackers have almost doubled ransomware cases since the epidemic began.
• Hackers explore new terrains for attacks. The urgency in remote work has transformed millions of employees’ houses into their offices. However, in day-to-day life, people don’t treat network security as companies do. Home offices rarely have secure firewalls, routers, and access management run by dedicated workforce. This situation creates new opportunities for hackers allowing them to test their exploits on employees’ devices and networks.
• Internet of Things. IoT also brings infinite possibilities for hackers. With an estimated 30 billion connected devices by 2025, hackers will definitely explore these opportunities for breaching into corporate networks. Implementing serious security measures consumes a significant part of the budget. This fact may negatively affect the IoT industry and become a serious startup challenge for IoT entrepreneurs.

8. Balancing Quality and Growth

In the perfect world, quality and growth should always align in your company. It seems legit to grow your business while providing quality services. However, things aren’t that simple. Expanding to new markets and broadening your scope of activities implies making large investments in new workforce, offices, and operational expenses before seeing actual profits. Eventually, if expenses are higher than the revenue generated by a specific market, the product quality may downgrade or the price may rise up.

To overcome this business challenge, you should clearly understand your growth criteria and what exactly you want to achieve. Accelerating your growth trajectory too much may lead to operational inconsistencies, deteriorated customer experience, and degradation of the brand image. Don’t push for instant profits, instead approach challenges of growth in business with ease. Keeping up with customers’ needs is what makes you stand out among other companies that are in a rush for revenue.

9. Attracting and Retaining Talents

With millions of people losing their jobs, those who are still employed usually stick to their places and don’t search for new job opportunities. This fact made hiring talents much harder these days. Especially when we’re talking about software engineers. Since all companies digitalize, these fellows have a lot of work to do. Management constantly increases developers’ salaries to keep them in their company. Enormous engineers’ salaries may become one of the challenges of starting a business today.

Still, if you’re planning on attracting new workforce, you should find experienced recruiters and provide them with up-to-date recruitment software. Besides, calculate your budget for developers. It’s hard to estimate an average salary for an engineer because it depends on a tech stack they work with and their work experience. You can use Glassdoor to learn about median salaries for developers with the required experience. If you don’t need an in-house team, it may be better to consider the services of a third-party vendor to deal with this business management problem.

10. Identifying New Sales Channels

Expanding your sales channels and retaining current customers is the last but not the least on our list of business challenges for the upcoming years. To get new customers you should know exactly who your existing customer is. Knowing your client’s gender and age is not enough today to accelerate sales. You have to clearly understand why customers are into your product and how you can scale your sales to new customers. Fun and Function case study explains how you can target a proper audience.

We Can Help You Solve Your Business Challenges!

As it comes clear, recent events have changed the way entrepreneurs run business. Digitalization became an inevitable part of any business strategy. We at OpenGeeksLab can help you overcome all business challenges and build any software product that meets your business requirements. Our extensive experience across numerous industries helps us deliver the quality that customers expect. Contact us and discover how we can collaborate to lead your business to a new level.