Small Business Problems: 8 Tough Challenges That You’ll Soon Face
Were you one of the 5.4 million new businesses that started up in 2021? If so, congratulations! It’s the start of an exciting adventure with the possibility of making a real change in your life.
But one thing all new businesses have in common is that sooner or later, they’ll hit some bumps in the road. Some may come out of leftfield, but others are common problems faced by small businesses. Being aware of these potential hiccups before they arise can put you in the best position to face them with confidence.
Let’s take a look at 8 small business problems – and what you can do about them.
1. Losing Key Employees
Your employees are your business’s biggest asset.
You need them all, but some experienced or highly skilled employees are truly key to the success of your business. Throughout the pandemic, many people have reassessed their goals. You could see crucial personnel moving on to pastures new.
Open communication with these valuable team members can help. Encourage them to come to you with concerns and actively work with them to make staying put their best option.
At times, tragedies happen. A key employee could get sick or even die. To prepare for that situation, take our key person insurance.
This is business insurance that protects you against the loss of an employee through death or serious illness. It can also help you to pay to recruit a replacement.
2. Relying on One Client
Having one big client is both a blessing and a curse.
They give you lots of work, they pay on time, and you’ve got a great relationship with them. The problem is that if that relationship sours or they run into difficulties, you’re left high and dry.
You need to find a way to diversify your client base while continuing to meet the demands of your main source of revenue. Ways to do this include analyzing the market and spotting gaps you can fill. Be attentive to client feedback on how you can improve your services or products.
Also, increasing business-to-business marketing to attract new clients is a smart move.
3. Knowing How and When to Grow
One of the biggest problems in the business process is knowing when your business is ready to grow. Increased demand is not the only driver. To grow in a sustainable way, without running into other business challenges, you’ll need to plan carefully.
That means having a clear vision of how the business will grow and having systems in place to support that. Are there systems that you can automate to make better use of your human resources? Do you have the e-commerce systems in place to deal with increased sales?
Streamlining business operations should give you the capacity for growth. This will allow you to add and train new employees and maintain quality, which is crucial to the success of your expansion.
4. Too Owner Focused
Let’s get personal – can your business survive without you?
It’s easy to be modest and think it can, but is it really dependent on the relationships that you’ve built up with clients? Do they expect to deal with you, and only you? If so, your business will only last as long as your involvement with it.
The key is to slowly begin to train your clients to deal with other people in the business. Train your staff to be as good – if not better – than you are at keeping clients happy. Plan this transition carefully so that the inevitable drop in quality is not too great.
5. Money Worries
Every business will struggle without strict financial management.
You need to have cash assets in place to fund your business as it gets established. This could be in the form of a business loan or assets you already have that you’re willing to invest. Wherever those funds come from, you need to spend them wisely.
From day one, accurate bookkeeping is essential. Every dime, nickel, and cent needs to be accounted for. If you’re inexperienced in managing finances, get help from an expert.
6. Advancing Technology
Technology can streamline processes in your business. It can make your employees more productive and ultimately improve your bottom line. The pandemic showed that business didn’t have to stop during shelter-in-place orders, thanks largely to an abundance of tech.
Research by the Pew Research Center indicates that the new normal will be even more tech-driven than ever. It’s not about throwing money at new tech. It’s about investing wisely to maximize the benefits for your business.
Every business needs a technology plan. A team of key individuals in the business should evaluate existing technology and develop a plan and budget for future upgrades.
Fatigue and burnout are common business problems when starting out.
In the early days, owners typically manage and perform a lot of the everyday work. Despite your drive and desire to make the business succeed, fatigue is normal. Burnout can happen when you get overwhelmed and can’t continue at the same pace.
Balance is crucial. You need to find a pace that keeps the business – and you – afloat. We don’t make our best decisions when we’re tired and overwhelmed. This isn’t just about taking care of yourself – it’s about taking care of your business as well.
8. Finding Customers
Every business faces this challenge and its one that never goes away. Small businesses don’t have the resources of mega-corporations. You need to target your marketing very carefully.
Research your audience well. Create buyer personas so that you know exactly who you’re talking to.
Identify and Avoid Small Business Problems
Small business problems like the ones we’ve discussed are an inevitable part of life. But business problem-solving starts before problems arise.
You need to look to the future in terms of who your clients are, how you can find new customers, and how to manage changing technology. Creating plans for recruiting and retaining the best talent and growing sustainably will help you keep your business on an even keel.
Are you looking for more hints and tips to maximize your small business? Head over to our Business Minded section today!