The 6 Biggest Business Problems for Small Business Owners
- Managing your money.
- Building a quality team.
- Providing healthcare for your employees.
- Establishing a brand identity.
- Scaling your business.
- Following the rules.
Every new business venture comes with its own set of unique challenges, and small businesses are no exception. For newly minted entrepreneurs, those quintessential business problems can break their operations if they’re not addressed properly.
In fact, only half of small businesses will survive past their five-year mark; and that small business success rate falls to just one-third when it comes time to celebrate the first decade.
How do you ensure the longevity and success of your small business? The first step is knowing what business problems you’re potentially up against. Read on to learn about six business problem examples that every small business owner faces, and how you can tackle them to avoid putting your business in jeopardy.
The Problem: Managing Your Money
Perhaps the most lethal of all small business problems is staying on top of of your cash flow. Running a small business is not the same as balancing a personal checkbook. In addition to running day-to-day operations, small business owners need to track expenses and revenues, allocate funds for employee salaries and company resources, create budgets that reflect overhead costs and expected growth, and, importantly, pay their business loan and credit card bills in full and on time. Unless you have an accounting degree or background in finance, you might feel overwhelmed when keeping your financial obligations organized.
The Solutions
Yes, being a small business owner means crunching a lot of numbers (and keeping track of them). Lucky for the right-brained, you have a few tools at your disposal to help you out.
Install business accounting software
Setting a realistic budget for your business is only half the battle; the real challenge is staying on track. That’s why many small business owners look to online accounting softwares like QuickBooks and FreshBooks for support. These user-friendly tools track inventory and cash flow, run reports, estimate taxes, create and send invoices, and more.
Hire an accountant or bookkeeper
Even better than solely relying on your business accounting software to keep your books in order? Relying on an actual, human accountant. In fact, accountants are the solution for a variety of business problems.
If your budget allows for it, you might want to consider hiring an accountant outright. You don’t need to keep one on retainer, but your accountant helps you navigate benchmarks in your business’s evolution. That includes figuring out your business’s legal structure, expansion, and helping prepare year-end financial statements and tax forms. You can find one in your area by searching the U.S. Association of Chartered Accountants or the American Institute of Professional Bookkeepers.
Pick your business credit card wisely
What’s harder than keeping track of your business’s finances? Keeping track of your business’s finances when your personal finances are in the mix. For a whole host of reasons—not the least of which is avoiding extra stress during tax season—keeping your personal and your business finances separate is super important. This eliminates a whole host of business problems related to money management.
Sign up for a dedicated business credit card, and making sure only to charge business expenses on that card. There are literally hundreds of business credit cards out there—no-fee cards, travel cards, 0% intro APR period cards, and lots, lots more—so you’re spoiled for choice. Ultimately, you’ll want to choose the card that your credit score qualifies you for, with a rewards program that your business can truly benefit from.
The Problem: Building a Quality Team
There’s a lot of truth to the saying, “You’re only as good as your team.” For small business owners in particular, having a high-quality roster of employees is essential to your success. Chances are, though, you’re starting out with limited resources, which means you’ll need to hire fewer employees and make extra sure that every head counts.
The Solutions
What you’ll want to look for when you’re hiring? Passionate, scrappy individuals who believe in your business, bring a unique skillset to the table, and will fit in with your company culture. No matter how long your business has been around, here’s what else you should remember when building your small but mighty team. (Remember: Solutions to these sorts of business problems start with you and your methods.)
Be strategic
If you’re hiring your first employee, or feel less-than-confident about a particular facet of your business, bring someone onboard who can fill in those gaps in your knowledge or the business’s operations. If there’s an aspect that you’ll be taking the lead on, then it might not be necessary to hire someone with your exact skillset. Most important is that you approach each new hire with a clear sense of the job requirements and your expectations.
Take your time
This is where a lot of startups (and big businesses, for that matter) get it wrong. You might be inclined to fill key positions quickly, but it’s always better to pump the breaks than put the wrong person in the driver’s seat—and, potentially, end up needing to let them go if they’re not the right fit. These exacerbate your existing business problems, as those still with the team lose confidence in your decision-making.
When you’re considering potential new hires, ask thoughtful questions about their skills and career goals, be upfront about your expectations for the role, check past references carefully, and consider team dynamics. If you invest time and energy in the recruiting process, it will be better for everyone in the long run.
Strive for balance
It can be tempting to want to take control over everything in your business—especially when you’re just starting out—but it’s important to divvy up key tasks to avoid burnout.
“As a solopreneur, the biggest challenge has been delegating responsibilities and relinquishing control,” said Scarlett Roucout, founder of natural haircare line Wonder Curl. “We know we can do it best. However, we have to realize when a certain task isn’t the best use of our time.” Roucourt finds that her business runs more smoothly now that she’s mastered the art of outsourcing.
In addition to hiring a bookkeeper or accountant, you might consider looking for additional administrative support, working with freelance content marketers, or using one of these payroll services. There are also tons of productivity and business apps—some entirely free!— that can help with project management, file sharing, onboarding, and more.
The Problem: Providing Health Care for Your Employees
When you first hatched your business plan, you probably focused on big picture concerns: how to acquire funds, how to best structure your team, how to differentiate your brand and craft a strong value proposition… and so on.
You probably did not think too much about employee benefits, but health insurance is notorious for being one of the biggest pain points for small business owners. That’s because finding the right plan can be timely, complicated, and downright dangerous for your business, if chosen incorrectly.
The Solutions
There’s no magic formula you can follow that’ll make the health care search suddenly easy. What you can do, though, is keep your search organized and, potentially, avail yourself of professional help.
Do your homework
There’s a wide range of health insurance providers and plans, so you’ll want to do plenty of research before making a decision. Also know that there are several required documents and a ton of business information that you’ll need to provide in your application, so it’s best to prepare ahead of time.
You should also carefully consider your business financials to determine how much you can spend on benefits, and where that money will come from. Some businesses choose to factor it into their payroll expenses, while others deduct the cost for each employee on a monthly basis. The choice is all yours.
Know your options
If you’re totally overwhelmed by the task of finding the right health care for your company, consider working with a licensed health insurance broker. Your broker can do the “shopping” for you, and help to make sense of your options. They typically charge a commission fee of about 15% of the policy premium. Most times, they can also assist with billing, eligibility, and claims, as well as the renewal process later on.
The Problem: Establishing a Brand Identity
Regardless of your industry, one of the most crucial steps in starting your own business is developing a strong brand identity. This is how you position your brand in the world, and how you want consumers to experience it. Questions of brand don’t start off as pressing small business problems, but they can grow over time.
“Getting marketing involved soon is essential,” said Michael Simonetta, founder and CEO of Kibii, a social planning app that allows its users to discover new experiences in their area. “You need to start marketing your product or service even before you begin development.”
But for small business owners who lack marketing experience, this can pose one of the most daunting tasks—how do you go about defining your brand, and which marketing channels should you use to spread the message?
The Solutions
When tackling your brand identity and broader marketing plan, consider the following ways to go about business problem solving:
Get real feedback
Simonetta explains that while it’s easy to make assumptions about your target demographic based on market and competitive research, you’ll learn the most from direct feedback. For a software or service, this could mean conducting a series of user tests. But for other small businesses, the tactic could be as simple as delivering your elevator pitch to family and friends—or, better yet, testing out your product or service on them—as a means of crowdsourcing.
Identify your niche
This one’s especially important if you’re starting a business in an competitive marketplace. Consider your target demographic, what sets your product or service apart, and how you can weave that speciality into your brand positioning.
Nicole Faith is the founder and Concept Concierge™ of 10 Carat Creations, a consulting firm for freelancers. As soon as she narrowed in on “sophisticated solopreneuers” as her target clientele, she says it was like striking gold. “Once I pivoted, I had an easier time talking to people about my business, which made me more memorable,” she said.
Take your business online
When you’re shaping your brand identity, online marketing can be a powerful tool. First, create free business accounts on social platforms like Facebook, Instagram, Twitter, and LinkedIn. You can also pay by the dollar for promotional ads to run on Facebook and Instagram. Both tools allow you to choose an audience based on target demographic or behavior, allowing for optimal discovery of your business.
You’ll also want to create a website that easily lists out products, services, and contact information for your customers. Try free website builders like WordPress, Wix and Weebly, which offer customizable templates and allow you to register for domains. Once your business has some cash to burn, you can pay for a subscription to Squarespace, fix errors with on-demand support, or enlist the help of SEO experts to optimize your online presence and drive organic traffic.
For more ideas, check out six of the most effective online marketing tactics that you can implement with as little as $50.
The Problem: Scaling Your Business
There’s one buzzword in particular that summarizes this next big set of business problems for young businesses: growth. When asked their company goals, most small business owners will reply with some variation of this word. Scaling a business, however, rarely comes easily.
If you’ve ever heard the term “growing pains” applied to a small business, it’s usually a result of trying to scale too rapidly, without taking the time to address existing or potential roadblocks. This could manifest as greater sales with less profitability, or more employees on staff without any notable impact on efficiency.
The Solutions
The biggest takeaway here is to slow down and try not to rush your business expansion. But there are a few other pointers to keep in mind.
Trim the fat
When you’re laser-focused on growth, it can be difficult to see some of the glaring weaknesses of your current operation. Take stock of ongoing business challenges, inefficiencies, and overspending, and address those issues ASAP.
Focus on company structure
Before you can scale your business, it’s important to refine the infrastructure already in place. The best thing to do here is ask for honest employee feedback. You’ll often gain the best insights into productivity and workflow from team members on the ground level. You might learn that certain processes can be bypassed or outsourced to optimize efficiency.
The Problem: Following the Rules
Even if you’re your own boss, that doesn’t mean you’re exempt from the red tape of governmental regulations. Some of these regulations include, but are not limited to: licensing and permits, employment laws, payroll and sales taxes, environmental codes, and email marketing anti-spam laws.
The Solutions
If your head is already spinning, keep reading. These are some of the tactics that you can utilize to ensure that your business stays legally complaint:
Hire a business lawyer
While most small businesses won’t need an in-house lawyer, having have a reputable attorney on speed dial helps. Refer to our comprehensive guide for hiring a business lawyer, which details why every small business needs one, what types of services you can expect, and how to go about your search.
Use a tax software
Even if you’ve been filing your own taxes for years, it can become complicated for a small business. Consider using a tax preparation software like TurboTax or TaxAct to give you peace of mind when tax season rolls around. Of course, this is also when having an accountant or bookkeeper comes in handy.
Strategies to Remember When Dealing With Business Problems
Starting your own business can be exhilarating and rewarding, but that’s not to say your journey will be easy. The next time you find yourself face-to-face with any of the six business problems above, know that there’s more than one solution to every challenge. It could mean exploring money management software, kickstarting marketing efforts right away, or asking your team for feedback.
Bottom line? Stay organized, regularly take stock of your business’s challenges, and don’t be afraid to ask for help when you need it—whatever your business problems, there’s a service or professional to help you fix it.
The post The 6 Biggest Problems for Small Business Owners—and How to Beat Them appeared first on Fundera Ledger.
from Fundera Ledger https://www.fundera.com/blog/small-business-problems/
No comments:
Post a Comment