Owning a small business creates independence, creativity, and the opportunity to control financial freedom for its owner(s). Many have recently ventured into the world of small business ownership following the Great Resignation Era and while the transition to business ownership can be exciting, it can be equally challenging. Fortunately, there are methods that can be used to encourage success. Let’s discuss some common small business problems and solutions.
Quality Employee Retention
The quantity of workers has presented a challenge for both small and large businesses—especially post-COVID as many are not interested in working for others. Additionally, the quality of the workforce has decreased. It is difficult to recruit and retain the staff needed to successfully run a small business.
To combat this issue, small business owners can offer competitive wages and incentives, implement performance metrics, develop their teams, and set them up for success.
Market Conditions
In 2022, supply chain issues caused disruptions globally. The unprecedented price increases due to inflation have also affected most businesses across the board. To combat poor market conditions, business owners should plan ahead by increasing inventory, when possible, to avoid product shortages and having to pay increased prices. In this current environment, it is also important to be flexible; as the market is changing, business owners have to be flexible in their business model, as well.
Lack of Operating Capital
Lack of cash and access to cash/business lines of credit is a difficult business problem to overcome. Capital is often depleted when the business is small, leading to other issues such as the business’s inability to maintain inventory which, in turn, impacts the business’s ability to operate.
To address operating capital challenges, small business owners should look into the Small Business Administration (which offers loans), explore business grants that may be available for their industry/business type, and even consider friends and family fundraising as an option.
No Expert Advice
Taxes are important. As the business’s finances grow, small business owners will need to keep track of their income and expenses to estimate their required tax liability. While some small business owners opt for online bookkeeping and tax preparation methods, others hire a Certified Public Accountant (CPA) to ensure their taxes are done right. What’s most important is that small business owners get advice from a trusted professional.
To be successful, small business owners have to be ready and willing to adapt to changes in their internal and external environments. Businesses must be structured and established with the ability to modify when necessary, in order to survive. The common issues mentioned above can be overcome by exploring the solutions suggested and with a comprehensive plan and competent team in place. Prepare for things to change in your industry as well as the global market and you will be more likely to withstand unfavorable conditions.
Source:
Guidant. 2021, Guidant financial, 7 Common Small Business Problems and Their Solutions. <https://www.guidantfinancial.com/blog/top-business-problems/.>
