What are the biggest problems in small business? If you’re a small business owner, you face different challenges and limitations than larger, more established companies. Your business is guaranteed to run into problems at some point, and when it does, it’s likely that it will be one of the issues we’ve outlined below.
These are the 3 biggest small business problems owners face, and we’ve included our input on how to work through them and come out stronger on the other side.
The 3 Biggest Problems in Small Business
Limited money, limited time, and experiencing growing pains from rapid growth are all potential small business problems you will face along the way.
Which is worse? Having too little money, too little time, or being unable to adequately manage your business’ growth?
Relatively speaking, each of these issues is problematic, but with the right course of action, your small business can overcome these challenges and move on to the next milestone.
1) Running Out of Money
Handling the finances is one of the trickiest parts of owning a business. It’s more than just keeping track of accounts receivable, expenses, and bank balances. It only compounds the problem when you’re unable to get a line of credit or funding. Even if you think your business won’t need a line of credit or outside funding, it’s a real possibility–every business hits tough times financially, and you don’t want the element of surprise to be what causes your company to crumble.
To solve the money problem, here’s what you can do for your business:
- Put a financial reporting structure in place if you haven’t already–our comparison of QuickBooks and Quicken is a great place to start: QuickBooks vs. Quicken: A Full Comparison.
- Start documenting the way you’ll report financial guidelines and develop a standard practice that you and all your employees will begin to use.
- Use your financial reporting structure to build a projection or ‘forecast’ of your financial data and objectives.
- Establish regularity in checking and monitoring your reports. Data does no good if no one is analyzing it!
- Look into credit, investors, or other methods of funding to ensure your business always has a lifeline available should things go south suddenly.
2) Limited Time
Sage recently conducted a global survey of business owners and found that:
- 46% of all business owners work 40+ hours/week.
- 57% of German business owners work 40+ hours/week.
- 47% of American business owners work 40+ hours/week.
- 31% of Australian business owners work 40+ hours/week.
No matter where in the world you live, if you’re a business owner, you’re working overtime. You probably don’t have enough time to get everything done and taken care of at work, much less at home and in your personal life. It may sound like it’s part of the list of unavoidable small business problems, but it’s not. Stretching your time too thin is detrimental for an entrepreneur. Being busy 24/7 doesn’t often translate into success.
You need time off, time away, or time to yourself to ensure you don’t experience burnout. Look for ways to save time at work by making processes more efficient, delegating more tasks, or bringing in some extra help.
3) Growing pains
Your small business is on the right track if you’re experiencing growth, but it has to stay vigilant to manage that growth into something beneficial. Too-fast growth can be the death of an under-prepared business. Consider the scalability of your product or service. How will things change if you double the amount of business you’re currently doing? What will you have to sacrifice to keep up with that kind of growth? The sacrifices you’re willing to make are important.
What most business owners don’t realize is that the small business charm many customers originally ‘fall in love with’ and gravitate toward often disappears when a business begins to grow or decides to start making sacrifices. Customer service and personal relationship management seem to be among the first to go, unfortunately. This can backfire and turn your customers off, causing your business to fail during the crucial period of growth you were trying to sustain.
Small business problems are a little different than the problems other businesses face, and that makes their solutions a bit unique, too. If you’re experiencing too little money, limited time, or growing pains in your small business, don’t accept defeat or feel like you’re the only person going through it. Every business faces it’s fair share of challenges–the best ones figure out how to ride out the storm.
Want more? Check out our recent post on failure!