5 Common Challenges Small Businesses Face
Not sure how to deal with the startup challenges that are coming your way? Well, beginning a business is a huge accomplishment for a lot of entrepreneurs out there, but to maintain the startup is another enormous challenge. There are many challenges small businesses face including the things like building a brand, hiring the right people, and so on.
We are not saying that the large companies do not have any issues. They do, but there are some challenges small businesses face that the large companies have grown out of. Below shared are the five main most significant challenges that the small businesses face:
1. Client Dependence
If you have a single client that is giving you more than half of your income for the service you are offering, you are more like an independent contractor and not a business owner. This is one reason why it is crucial to diversify the client base for the business to grow smoothly. And this is one of the challenges small businesses face where growing the client base is not that easy.
Moreover, it is difficult mostly when the client who is already working with you pays a lot and on time as well. And it is understood that those businesses that have a single client who is paying for the regular services are a huge benefit for that company. But you need to know that can become a longer-term handicap since having employees or other things do not make you a business owner. Instead, you are still acting as a subcontractor for the big business.
This system permits the customer to sidestep the dangers of combining payroll in the area in which the task might get dried up at any time. And all these risks basically pass from the big company and come to you and your employees. However, this system of running your business can work only if the client constantly needs the service or product that you are offering.
Whatever be the case, it is always advised to have a client base that is diversified so that in case a single client stops paying, you have other clients to cover your income.
2. Money Management
Another one of the main challenges small businesses face is the management of money. To have money that would cover all the bills is something not only crucial for the business but also for the individuals. It does not matter if it is your life or your company, you would at least once in your lifetime come across a capital drain in one part that would put a lot of pressure on the other.
And so that this problem is avoided, every small business owner has to either have enough cash in their account or should be able to get extra income to gather the money and reserve it for the time when it might be needed. As a matter of fact, a lot of the small businesses that start, begin with the founder having a job and building the company at the same time simultaneously.
Even though this idea of working and running a business at the same time can be highly difficult when you want to grow a business, running out of money for building the company is also another thing that is no one wants to experience. And to avoid such challenges the small businesses face, you need to have a backup plan always.
Moreover, this is not all that comes under money management. Money management is also very crucial when there is a good flow of money coming into the business and to the owner as well. Even though managing business taxes and accounting might be something that the owner is good at, getting professional help is always a great idea.
The accounting book of the company becomes more complex as clients increase and even as the employees increase. Hence, obtaining the assistance for the bookkeeping can stop the company from having any obstacles when it has to be expanded.
The constant pressure to perform, the hours and the work pressure eventually damages the passion for achieving something for even the most enthusiastic individuals. A lot of the business owners always get stuck working for many more hours as compared to their employees. Moreover, this is not just for the startup owners, but also for the successful ones.
In fact, these owners fear that leaving their business for a moment as well would delay their business success which is why they avoid taking breaks from their work to recharge themselves a bit after a while. And fatigue can cause you to make rash decisions regarding your business where you can even have a thought of abandoning it entirely.
Searching for a pace that would keep the business running without exhausting the owner is one of the challenges that small businesses face early and a lot of the times. And it is something that has to be handled as the company exists only if the owner exists.5 Common Challenges Small Businesses Face Click To Tweet
4. Founder Dependence
In case you get hit by a car today, would your company still produce income the next day or not? A company that cannot run without the founder is a business with a deadline. A lot of the small businesses suffer from the founder dependence, which is often caused when the founder is not able to let go of some of the responsibilities and decisions as the business expands.
Fulfilling this challenge is very easy theory-wise where a business owner has to give up more of the control to the partners and employees. However, in practice, it is a big step for the founders as it mostly comprises the idea of negotiating the quality of the work that is being done (usually in the beginning) until the person gets a hold of all the responsibilities properly.
5. Balancing Quality and Growth
Even though a company is not a founder-dependent one, there would be a time where the problems for the growth of the company would either match or also surpass the benefits. It does not matter if the company is offering a service or a product, there has to be a time where the company has to make sacrifices for growing the overall business.
Moreover, this means that the founder would not be able to handle everything directly, such as managing the client relationships or examining every widget.
Regrettably, it is customarily this level of individual attention to detail and engagement that makes the company a semi-successful one. Hence, several miniature company owners frequently discover themselves drawn to certain practices to the disadvantage of the growth of the company like those mentioned above.
There is a huge gap between the unhealthy obsession with quality and the shoddy work. Hence, it is up to the owner for navigating the processes of the company towards a settlement which would allow it to scale without spoiling or hurting the brand.
The Bottom Line
There are many challenges small businesses face and the worst thing an owner can do is starting a small business without keeping in mind the challenges that they can face ahead. And with the points mentioned above, you now know all the challenges that you might face and you can prepare yourself accordingly to make your business move smoothly and grow easily.
As a matter of fact, you should never take a challenge as something negative. One of the reasons why people normally start their own business is due to the competitive drive and with every challenge that comes ahead, you have another opportunity to compete. So, if you have made your plans and want to start a business right away in the US, connect with IncParadise to have your company incorporated and registered. Check out our other services today!
Like what you're reading? Get fresh tips to start & grow your company.