October 7, 2018
5 Challenges Of Running A Small Business
Starting a small business is both a dream and a passion for many entrepreneurs. However, there are naturally many challenges ahead for owners in running that small business.
These challenges range from the usual suspects in any business such as hiring the right talent and building a brand through to the unique issues faced by small business owners. Here are the five biggest challenges of running a small business every owner faces.
1. Never Enough Hours In The Day
While a compelling dream and a business plan and are fine, many small business owners soon discover their business is a demanding master requiring their attention seemingly 24 hours a day, seven days a week.
From souring finance to developing the brand, negotiating with suppliers, determining pricing or handling customer complaints, a small business is a major and often all-consuming commitment.
An owner never clocks off and the level of personal commitment involved in running a small business can be hard on both families and on relationships.
2. Financing The Business
For many small businesses, their beating heart is their finance, whether it comes in the form of equity, short-term loans or lines of credit. This can be especially true for businesses making a significant volume of sales on credit or who don’t receive payment until a project is finished.
Money is the primary enabler of entrepreneurial ideas. Sourcing adequate financing can be a continual struggle until the business is bedded down and has a demonstrable track record. Even then sufficient securing lines of operating credit can be the cause of many sleepless nights.
There is also the issue of managing creditors and bad debts, ensuring your businesses underlying cash flow either remains positive or you accumulate a cash reserve to get you through those periods where your turnover fluctuates.
3. Balancing Risk Against Reward
Starting a business can be a brave decision and a leap of faith. Small business owners are continually be faced with decisions, which may put the future and security of their business in play.
Responsibility for sound contingency planning and a clear-eyed perspective on the brand and the business often rests on the shoulders of the owner rather than a large corporate strategy or finance department.
Understanding which risks are worth taking and which opportunities to pass up is one of the biggest challenges facing an owner. From a volatile business climate to turbulent currency markets to identifying sound growth opportunities through to unpredictable customer demand running a small business involves constantly weighing risk against potential returns.
4. Getting Close To Customers
One strategy for effectively mitigating business risks is to get close to your customers and stay there. Understanding their key needs and primary drivers together with their content preferences and especially their online browsing habits help small business owners in identifying different aspects of your customers’ needs can be an integral part of tapping into a market’s sales potential.
Tailoring your products to the millennial generation! Is very different to marketing to baby boomers. Understanding and mastering social media and online marketing can mean the difference between staying close to your customers or watching them increasingly drift away to your competitors.
While online and social marketing is far more affordable for small businesses than traditional advertising and marketing techniques, they require unique and at times difficult to source expertise. Finding the right specialist digital marketing agency to outsource your marketing needs to, can be almost as harrowing an experience as executing the actual work itself.
5. Being The Primary Decision Maker
There are many demands involved in running a small business and being your boss. The hours are often long, competition is intense and you frequently lack access to the resources and expertise to grow your brand and your business enjoyed by larger businesses.
Moreover, an owner is usually the final decision-maker and arbiter when it comes to competing opinions and ideas for growing the business. The pressure involved in carrying out the decision-maker is often under-appreciated by many would-be entrepreneurs until they find themselves in the hot seat.
Similarly, in a small business, an owner’s personal relationships with their staff can add to the pressure involved in managing the team. These social dynamics rarely assume significance in corporations where scale and complexity balance out the dynamics of many personal relationships.
Many smart small business owners find a trusted confidant, someone they can discuss their business with who will provide them with a sounding board
One mistake many prospective entrepreneurs make is to plunge into a small business without first considering all the many challenges ahead. While most are comparatively easy to identify, nonetheless they still need to be addressed effectively. Perhaps the biggest aspect of running a small business is just how time intensive it can be and quickly the boundaries between the business and an owner’s personal life can blur.
If you are wondering if we can help, just call!