Small business owners are usually go-getters who are comfortable with a healthy dose of risk. But even they have moments of doubt where they wonder if they are on the right track or if they can even survive their entrepreneurial adventures.
All small business owners and their businesses are unique but there are some similar challenges that many of them face. In this article, we will explore five of those challenges and offer solutions of how to overcome them.
1. Cash flow problems
Small business owners often face a challenge with cash flow. There always seems to be an issue with how much cash they are able to access at any given time. This is often due to the amount of revenues they generate from clients, as well as how they spend their money.
To manage cash flow problems, small business owners need to be very flexible when it comes to funding their business. They cannot necessarily depend solely on revenues from clients because that ebbs and flows. Small business owners have to be creative about bringing money into their business. Small business owners have to use their skills at financial planning, projecting, saving, and budgeting, among other things to raise money –especially during difficult financial times, because workers have to be paid, as do creditors. It is not a simple matter for a small business owner to tell its workers that there is no money to pay them due to cash flow problem. Indeed, it is possibly a situation that can land a small business owner in legal hot water.
Alternative financing options include credit cards, bank loan, tapping savings, cashing in insurance policies, and moonlighting on the side in a whole different area to raise funds. Small business owners must be careful, though, about the methods they use to stimulate cash flows. They should avoid things like loan sharks and other illicit methods.
2. Time Management problems
Many small business owners have their hands in many baskets at any given moment in time. They wear many hats, by necessity, and this can lead to issues with time management. There is no question that small business owners have to be exacting about writing things down and keeping a calendar. If possible, small business owners absolutely need an assistant whose role is to keep them organized, and help with time management. There has to be a reliable system small business owners rely on to keep themselves organized because the mishandling of time can be fatal to a small business. That is, time is the one resource that cannot be replenished. Once you lose it, it’s gone forever. So small business owners must do everything to assure that this problem is checked as quickly as possible.
3. Reliance on a small client pool
The more niche a small business is, the greater the reliance on a small client pool. This can be a blessing and a curse because it is good for small businesses to be focused on a target market, and concentrate on developing that, and growing that. The problem is that if things go awry, dependence on a small client pool can quickly become a death sentence for a small business because, if, for any reason, this pool gets polluted or corrupted, the small business can find itself cancelled swiftly and unexpectedly. The vulnerability that comes from having a small client pool, is that having a non-diversified portfolio, can obviously detrimental if not outright destructive of a small business owner’s livelihood. It is a delicate problem to troubleshoot because it is also good for small business owners to focus in on a target market.
There is no necessarily obvious solution to this challenge, it really is a question of awareness. By staying aware of the risks of catering to a small client pool, small business owners are always on the alert to adjust their strategy as the need arises.
Small business owners can have trouble recruiting the best candidates because they compete with larger companies with much deeper pockets who an offer their employees much better perks.
The solution is obvious, but it is not necessarily going to be feasible all the time because of budgetary constraints. To the extent possible, however, small business owners will need to put an appropriate emphasis on the perks they offer prospective employees. Small business owners must aim to offer the best perks they can afford to their prospective employees.
It is not just about perks, though. It also helps to put some emphasis on employee retention because after recruitment, even with great perks, if the small business is a toxic work environment, the employees will leave. So, cultivating a healthy work environment, while offering great perks, are two key ways that small businesses can recruit top talent.
5. Adapting to unexpected changes in the environment
The one thing that is sure, is that change happens whether we like it or not. For small business owners who are not adaptable and flexible to changes in the environment, business can be challenging if not downright impossible. Therefore, small business owners absolutely need to be chameleons. They have to adapt to changes in the business and social environment, to remain relevant.