Small cells and femtocells are becoming an increasingly important tool for service operators to address capacity and coverage issues as part of the heterogeneous network. This paper provides a brief introduction to small cell and heterogeneous network concepts and then it is followed by a number of challenges that R&D engineers will face and how to solve them, including how the 3GPP conformance tests are different for small cells, how to test the ‘Network Listen Mode’ which is a part of the Self-Optimizing Networks (SON), and a number of other unique challenges related to small cells.