Issues Small Business Owners Face
What are the issues small business owners face? This is an important question.Small business owners can run into a variety of problems which larger business owners do not have to worry about. Benefits associated with running a small business such as creating your own hours, hiring coworkers, and choosing the risks taken. Yet, there are also numerous problems that can arise that are hard to avoid.
Arguably the most prominent issues small business owners face are associated with fatigue. Small businesses often times have a limited amount of financial flexibility and cannot hire sufficient staff at a competitive wage. Owners are charged with an enormous amount of responsibilities which can be both mentally and physically draining. These responsibilities, coupled with the stress from the owner’s personal life, can seem almost unbearable sometimes.
Small business owners in these situations struggle to manage their time and resources to fulfill all of their responsibilities. A potential solution to the problem of fatigue is to expand the business. More employees can be hired and some of the owner’s responsibilities can be designated to alleviate them. Unfortunately, expansion is not always the solution and could create more problems.
Growth Vs. Quality
A major problem associated with the expansion of small businesses is the relationship between quality and growth. Small businesses are often capable of maintaining high quality work from the individualized attention they can provide to their clients.
However, these businesses may only be marginally profitable. Some owners have ambitions of expanding the company to generate more income. Owners that choose to expand can find themselves in a catch-22. Small business owners sacrifice the personalized attention they were able to provide with only a few clients when they expand.
Naturally, when personal attention decreases, the quality of work is susceptible to decrease as well. Small businesses that are looking to expand have to be extremely careful in their approach to doing so.
The most common way that small businesses choose to grow is by hiring more employees and purchasing additional property. These are effective solutions but can increase the risks associated with the company. Increased risk can bring on a significant financial burden without guarantee that the client base will continue to grow.
In addition, relationships the owner has with the original clients become hard to maintain with the addition of more and more clients. Monetarily, it can make a lot of sense to expand. Yet, the business can be more difficult to maintain from the increase in the number of decision variables.
Cash flow, the life blood of any small business, is especially important. This is probably the most draining and stressful aspect of business for all small business owners.
A strong cash flow allows owners to concentrate on other aspects of their business to grow revenues. Without strong cash flow, Small Business Owners will be stifled. This leads to additional issues for them to face on a daily basis, such as making payroll or purchasing inventory. Small business owners do not have the luxury of decreasing a marketing budget, reducing inventory spend, or cutting employees. Doing so will negatively affecting their revenue stream.
Additionally, Maintaining a banking relationship with a traditional bank or alternative financing source is paramount and should be given priority. Having a fail-safe available to secure additional capital when needed will allow you to sleep at night.