TVMSME HUB has been an invaluable resource for awhile. They’ve done research on everything — from job openings to labor markets, from capital spending budgets and the cost of inflation; on a monthly basis. Here are the biggest challenges presented in a recent report.
Biggest Challenges for Small Business Owners
Whether you’re thinking of starting a small business, or in the first few years of operation, here are common problems we’ve all faced at some point in time.
1. Growth vs. Quality
In time, a business may boom beyond growth expectations. Small business owners who haven’t planned for this increase in customers and product/service production are liable to fall by the wayside. As demands for your business increase, without the proper systems in place, you’re more likely to come up short and fall short of those demands. This is why it is crucial for you to scale up your business – without sacrificing the qualities that made you such a hit in the first place.
2. Hiring New Employees
Around the nation, many small businesses face employee-hiring troubles. The cost (equipment, benefits, taxes, bonuses, etc.) of hiring new employees, unfortunately, keeps rising. All those hurdles come into play before outlining the position’s salary.
Without employees, a small business cannot run successfully (with the rare exception of home-run businesses). In the event that you can, life would be a lot easier if you had a few employees under the belt. It’s always wise to judge the profit against the cost.
3. Cash Flow
From online invoice software to better budgeting systems and effective cash flow management, this challenge can be overcome. However, virtually every small business owner has cash flow problems. One simple tip is to keep strict track of your money, where it’s coming from, and where it’s going.
4. Staying Passionate
In the daily grind of living, it is crucial more than ever to be obsessed with what you’re doing. Otherwise, the quality of your product/services suffers… thereby giving your customers a shoddy experience… which inspires them to take their business elsewhere. That is why obsession is a critical component; when you’re obsessed, working 14-hour days isn’t as big a hassle. Without obsession, you’re more likely to let your small business fold instead of fighting for it. Without obsession, work becomes another mindless grindstone to put your nose to. If you’re still thinking about starting a business, make sure you are selling a product or service that you are passionate about.
5. Not Diversifying Client Bases
I want you to take a good, long look at your client list. If you have any clients who are responsible for more than half of your business income, it’s time to a) generate more clients or b) work better deals for your other clients. When your income has you riding one “whale”, that one whale could dash off to do business with someone else. Leaving you in the ocean, possibly drowning, while your other clients—or “small fish”—and their small incomes. Don’t let your business rely on one client – it’s a recipe for disaster.
This is especially hard if you’ve never run or managed a team before, but even if you have management experience, picking the right team for a startup is stressful and difficult. It’s not enough to find candidates who fill certain roles — you also need to consider their cost to the business, their culture fit and how they’ll work as part of your overall team. Such considerations are exceptionally hard when you’re under the pressure of filling those positions as soon as possible.
7. Health Care
Bar-none, one of the most challenging aspects of running a small business comes from managing health care for your employees. Without a doubt, your workers’ health is important, but the increased healthcare costs make finances difficult to manage. While “Obamacare” is undoubtedly beneficial for the health of workers, it’s often the business owners that receive the financial blow.