Top Challenges Facing Small Business Owners
Running a small business can be the most liberating experience in the world. Whether you’re a one-man or one-woman operation, a family business, or an energetic young start-up spearheaded by a group of friends, small business life has much to offer and many rewards both in terms of professional growth and on the financial front. But this doesn’t mean running a small business is easy. Small business owners also face many challenges unique to the scale of their enterprises from founder and client dependence to cash flow issues to fatigue to growth management issues.
Top Five Challenges Facing Small Businesses
In most organizations, the loss of a CEO is tragic but the larger the enterprise, the more likely it is that the organization can move on. Even Apple was able to continue without its singular leader Steve Jobs. This is because in large enterprises, the brand and infrastructure typically are larger than any single individual. If Bob’s Home Repairs loses Bob or Karen’s Tax Consulting loses Karen, however, the situation is different. The founder and often sole owner of a small business is the business’s life blood. As small business’s grow, then, it’s critical to come up with an exit strategy and even to diversify one’s leadership and ownership pool. Even it it’s preparing an adult child to take over, the gains can be great if tragedy strikes.
Another key issue facing small businesses is client dependence. Some small businesses rely on just one two clients for their income. If the client or clients have a bad quarter, the small business owner falters too. Let’s say you’re running an editing service. 80% of your editing is for a single publisher who pays you approximately $40,000 per year. Then, the publisher cancels the contract. Since living on $20,000 is not an option, your business is essentially over. But how do you prepare? Do you take on more clients, but how? Do you hire other contractors to do some of the work in order to diversity, but then what happens to your small business? These are tough questions, no doubt, but critical ones too.
Cash flow in large organizations can be an issue but in most cases, even when cash flow is low, there’s always some money in reserve. This is not the case in small businesses. Part of the problem is that the smaller the business, the more likely one is to have merged personal and businesses finances. This means that when business lags, personal finances are often immediately impacted. But anyone who knows anything about business will tell you that selling your car to keep your business afloat is never a great idea.
If you own a small business, chances are, you’re working hard—really hard—and all the time. Fatigue is a real and serious issue for small business owners. Afraid to take any time off, small business owners are prone to health issues and to other problems, including family and marriage breakdowns. Knowing how to take time off and when to take time out is critical, however, to any small business owners’ longevity and success.
A final and perhaps less dire but nevertheless notable struggle facing small businesses is how to manage growth. While scaling up is always a good idea, scaling up too quickly or without the right safety guards in place can be a problem. Models that work well when you’re running a business with one or two or five employees can be a nightmare when you move up to 20 or 30 employees. As such, knowing when and how to grow—at what pace—is essential too.
How Training Can Help
When you’re running a small business, training may be the last thing on your mind, especially if the target of training is yourself. Nevertheless, taking care to remain up to date in your field and on current business practices is a critical part of remaining competitive whatever your field. To get started, find out how eLeaP’s affordable and fit-to-scale training programs can help you stay on to of your game no matter how large or small your enterprise may be.