The backbone of the United States economy is built by small, micro, and medium enterprises (SMMEs). According to the Small Business Administration, these small businesses make up 99.9% of all U.S. companies, employing nearly half of the nation’s workforce and creating 4.9 million jobs between 2021 and 2022. Among the 33.3 million SMMEs, 80% are solopreneurs, while the remaining 20% contribute significantly to private sector employment.
These numbers are impressive, but they don’t tell the full story. SMMEs face unique challenges in today’s business landscape. Inflation, high interest rates, access to credit, and employee retention are some of the most pressing issues they confront. The U.S. Chamber of Commerce’s Small Business Index reveals that 55% of SMMEs see inflation as their biggest challenge, followed by revenue concerns (26%) and the cost of employee benefits (18%).
Yet, despite these challenges, small businesses remain resilient and optimistic. A remarkable 73% expect revenue growth in the next 12 months, fueled by positive outlooks on the economy, cash flow, hiring, and revenue. With 22% of businesses increasing their workforce—six percentage points higher than in 2023—there’s a clear trend toward hiring talent skilled in AI to save time and money in the long run.
Entrepreneurs, whether leading a one-person operation or a larger team, are finding ways to stabilize and grow, even in uncertain times. However, as SMMEs scale, they must navigate specific challenges that could derail their progress. Balancing these obstacles with optimism is key to sustained growth.
Navigating the Key Challenges in Business Growth
As businesses scale, three challenges commonly arise:
- Competing in a hypercompetitive market while finding agile strategies to stand out.
- Establishing robust systems, processes, and strategies for long-term success.
- Aligning people and culture with the business’s goals.
To thrive in a competitive market, a business must find its unique voice and adopt a multi-faceted approach that leverages its strengths. This involves understanding what sets your business apart—be it expertise, innovative products, or exceptional customer service—and embedding this identity into every aspect of your operations. Authenticity is key; it’s how you resonate with customers and stand out in a crowded marketplace.
This approach must be holistic. On one hand, you need smart strategies that capitalize on your strengths to connect with customers quickly and effectively. Smaller businesses have the advantage of agility, allowing them to adapt to market changes faster than larger competitors. On the other hand, you must integrate this authenticity into the very fabric of your business by establishing systems, processes, and strategies that ensure longevity.
Without strong systems and processes, a business lacks the resilience needed for sustainable growth. Economic fluctuations and industry disruptions are inevitable, but with the right frameworks in place, your company can weather these storms without losing momentum. Well-established systems enhance decision-making, keep the business focused on its core objectives, maintain its values, and increase operational efficiency. These are also critical for reducing errors, streamlining operations, and creating a solid foundation for future expansion. Clear strategies create a stable workplace culture, which is crucial for long-term success.
Effective systems and processes also contribute to employee well-being, providing clear guidelines and reducing workplace stress. They make the business less dependent on any single individual, which is vital for sustainability. If you can create a business that operates smoothly without constant hands-on management, you’re setting yourself up for growth while building a culture of shared commitment to success.
Turning Challenges into Opportunities
Executing a high-level strategy across multiple fronts—systems, processes, strategy, brand, people, and culture—can be challenging. But by focusing on the building blocks, you can turn these challenges into opportunities. Want to stand out? Define a unique selling proposition that clearly communicates your business’s identity and values. Let this be reflected in who you hire, how you engage with customers, and the authenticity of your communication and collaboration.
Aligning every aspect of your business is essential, particularly when it comes to people and culture. In businesses with multiple founders, competing personalities and visions can create friction, potentially jeopardizing the company’s future. From the outset, establish a unified direction understood by everyone. This ensures that every team member knows their role, the rules, and how to operate efficiently within the business.
Maintaining this alignment becomes more challenging as your company grows. Preserving a high-performance culture during rapid expansion is complex. For instance, as your workforce grows, communication issues can arise, making it harder to minimize misunderstandings and streamline collaboration. Addressing this requires proactive strategies to maintain clear communication channels, reinforce cultural values, and ensure all team members remain aligned with your core mission and objectives.
Culture First, Talent Second
Running a SMME is akin to managing a talent agency. Success lies in identifying the right people for the right roles and maintaining a team-first culture. Consistently emphasize alignment with your values and mission, ensuring that every hire fits within your culture.
This approach may mean passing on talented individuals who don’t align with your firm’s values. Scaling is a unique challenge in terms of talent acquisition for SMMEs. Continuous recruitment and integration of new team members is a constant process. However, a culture-first approach is the most effective way to scale with people who understand and engage with your business culture.
Talent is at the heart of your success. You can build exceptional teams from skilled individuals, but you can’t thrive with talent that disrupts your workplace culture. In the end, people and culture are the cornerstones of your success, balanced by solid processes and an authentic brand identity. Together, these elements form the foundation for a business that can scale with resilience and sustainability.
Steve Mehr is a founding partner of Sweet James, one of the largest and most respected personal injury law firms in the United States. With over two decades of experience, Steve specializes in representing victims of catastrophic injuries, product liability, vehicle and boating accidents, brain injuries, medical malpractice, and more. As an entrepreneur and business leader, Steve has a passion for growing businesses and helping others scale their businesses.
