5 Biggest Challenges Facing Your Small Business
1. Client Dependence
If a single client makes up more than half of your income, you are more of an independent contractor than a business owner. Diversifying your client base is vital to growing a business.
2. Money Management
Having enough cash to cover the bills is a must for any business, but it is also a must for every individual. Whether it is your business or your life, one will likely emerge as a capital drain that puts pressure on the other.
Although handling business accounting and taxes may be within the capabilities of most business owners, professional help is usually a good idea. The complexity of a company’s books increases with each client and employee, so getting an assist on the bookkeeping can prevent it from becoming a reason not to expand.
The hours, the work, and the constant pressure to perform wear on even the most passionate individuals. Many business owners, even successful ones, get stuck working much longer hours than their employees. Finding a pace that keeps the business humming without grinding down the owner is a challenge that comes early in the evolution of a small business.
4. Founder Dependence
If you get hit by a car, is your business still producing income the next day? A business that can’t operate without its founder is a business waiting to fail. In theory, meeting this challenge is easy, a business owner merely has to give over more control to employees or partners. In practice, however, this is a big stumbling block for founders, because it usually involves compromising on the quality of work being done until the person doing the work can take over.
5. Balancing Quality and Growth
Even when a business is not founder dependent, there comes a time when the issues from growth seem to match or even outweigh the benefits. This may mean not being able to personally manage every client relationship or not inspecting every product.
Unfortunately, it is usually that level of personal engagement and attention to detail that makes a business successful. Therefore, many small business owners find themselves tied to these habits to the detriment of the company’s development. It is up to the business owner to navigate the company’s processes toward a compromise that allows growth without hurting the brand.
The Bottom Line
The problems faced by small business are considerable, and one of the worst things a would-be owner can do is to go into business without considering the challenges ahead. On the other hand a competitive drive is often one of the reasons people start their own business, and every challenge represents another opportunity to compete.