Top 8 Challenges Small Business Owners FaceMadi
Customers. Cash flow. Communications. Those are just a handful of the challenges that small businesses need to navigate as they carry out their day to day activities, and there’s countless more. So you can avoid encountering major issues – or be prepared to deal with them when they come your way – we’ve prepared this list of eight of the most common challenges you might face as a small business owner.
1. Time constraints
Time is precious, and it can often seem like there’s not enough of it. As a small business owner, you’re probably juggling multiple tasks every day. Even with a time management system in place, it’s easy to fall behind when there’s a range of priorities calling your name.
Productivity is the key here, so in addition to planning your time, you should be setting time frames that are slightly generous (so you don’t over-commit yourself), prioritise the most important tasks and be sure to take regular breaks.
2. Cash flow
Running a small business, especially in the early days can be expensive: you might have expenses like equipment, facilities, or other related start-up costs that you’ll need to budget for. So, money will need to be coming in – but without consistent sales or having built a loyal client base, it can be tough.
Addressing financial challenges is crucial to the future of your business, so improving your cash flow should be one of your top priorities. Consider things like streamlining your invoicing process (seeking help if need be, including investing in money-saving technology), reducing stock on hand wherever possible (so there is more money available for growing your business) and by measuring your business margins so that you’re aware of exactly how much you are making per sale – and if it is sustainable or not.
3. Your own finances
Financial challenges facing your business are one thing, but your personal finances are just as integral to the survival of your business as things like cash flow or funding are. As an individual, you need to feel comfortable with your own finances so you don’t feel the need to dip further into your business profits – or worse, money set aside for business expenditure, as this could create problems in the future.
4. Making a profit
Perhaps the challenge that most small business owners’ would think of first is making a profit. There are a range of different factors that will contribute to your ability to make a profit, including a solid business plan, effective marketing and adequately addressing the other challenges on this list.
5. Managing employees
Writing position descriptions, employing staff, and ensuring they’re satisfied with their position, pay and responsibilities are time-consuming activities. Add to the mix is the task of finding a range of people who work together both happily and efficiently, and staffing can present a major challenge to any small business. To make sure you’re getting the most out of your employees (and that any employees are happy with what you’re offering them – after all, their loyalty can only benefit you), set aside adequate time for employee-related matters, and don’t be afraid to reach out for help if it’s not your area of expertise.
6. Digital marketing
Marketing is a must for any small business, and in 2021, digital marketing is crucial. It might be true that time and money can be a barrier to being competitive online, but the alternative – not having a digital presence whatsoever – has the potential to harm even your offline marketing efforts, as many consumers will search businesses online after being exposed to more traditional forms of advertising. It’s smart not to resist the increasing move towards online marketing, even if you don’t abandon traditional marketing completely.
7. Legal and accounting
When starting your small business, you should take time to consider how you might be able to access legal advice or accountants if you encounter a problem along the way. One of the biggest challenges that small business owners can face, a serious one at that, particularly from a financial perspective – is the risk of not knowing how to access a lawyer or accountant in times of need.
8. Technology and innovation
Keeping up with changes to technology and being open to innovation is important to the future of your business. – But, it can be daunting, and particularly so if the industry your business sits in is hesitant to embrace it. Keep an open mind. And, to ensure you keep ahead of the competition, take the time to invest in research and development.