Top 7 obstacles faced by Small Businesses
Following are 7 obstacles faced by small businesses
1. The issue of Cash Flow
Cash flow is among the most significant aspects of a startup business.
Close to 82 per cent of small businesses that fail is because of ‘poor cash flow’ management skills.
Delayed customer payments
as well as a number of more factors can lead to a cash crunch which threatens the company’s ability to grow and survive.
Solution – Fill out a ‘cash flow’ statement utilizing a template which can show you where and when money flows in & out of your business. It also helps you to see clearly where in the business there may be some cash flow issues allowing you to plan accordingly.
2. Admin Hell
One of the most common obstacles in a new business.
You just started your building company and you want to focus on working on site building that home, but here you are stuck at a desk, with mountains of paperwork, lost bills, unsent invoices, and misplaced customer orders. Without having the correct organisation skills and support, a small business can be the victim of its own success.
The loss of one working order, or a missed appointment can lead to damaging your company's reputation and send your client to a potential competitor.
Solution – Look at your weak points to analyze where you require help. If you need help with accounts, billing, collections and payments then consider hiring a bookkeeper and get the business back in shape. If you need help with scheduling then you may need certain software that can offer reminders and calendars or hire a personal assistant.
Businesses struggle to build a business that maximizes productivity. How do we make the most of our 8 hr work days? How to we increase efficiency? Time is money and how to we improve this?
Simple things like switching to apps and using technology to remove manual time consuming tasks and let the staff focus on creating value in areas where they have the greatest customer impact.
Using invoicing software instead of manually doing it, incorporating payment systems within your invoicing system so customers can play directly instead of having to send them bank details and waiting for their response. There are many time saving applications that can help your business dramatically.
Marketing the business using easy to use applications to create beautiful designs and uploading simultaneously on different social media platforms is a huge time saver.
Many business owners remain ignorant of all the processes involved in running a business. The challenge is to make the processes involved in running a business easier to monitor and take action.
Failure to manage the processes including sales, operations, manufacturing, procurement, distribution, marketing, HR, WHS and administration will inevitably lead to loss making and worse business failure. Often business owners are stretched across many business functions themselves to “save” money. Usually this is a big mistake.
Business owners are filled with so many choices when it comes to marketing.
and many more
Bare in mind every business is different, Don't fall into the sheep mentality and follow what everyone else is doing but cater it for your business. If you are an online business then of course you will need social media marketing, but if you are a construction company maybe the old fashioned networking and and personal referrals will be most beneficial way to market your business.
Don't waste all of your profits and minimize your cash flow by paying for things that are unnecessary.
Some things can be done for free such as word of mouth referrals.
Something we wish we all had more of. This is definitely one of the top challenges for all business owners.
Business owners are so stretched for time as it is so in order to create more time we need to learn to prioritize and outsource.
Firstly focus on what is essential . Secondly outsource and let others do what they are good at for you.
This is where a smart business owner will engage with a business advisor, accountant or financial planner to focus on what is critical and what are distractions remembering to always maintain a sustainable work life balance to stay alert and not burn out.
Know your profits for each job. Many business owners work without knowing how much they are actually earning per job. They accept jobs and accept clients and give out the wrong quotations or have calculated costs incorrectly only to find out later that their bank account is not growing.
So firstly you need to start with a formal annual budget, understanding the profitability of each client and the overheads required to generate a great customer experience as well as a sustainable profit margin. There is no point in having clients where you lose money in the process.
Business owners create wealth and grow their business because they understand how to build a company where sustainable profitability is a given.
This information is not to be relied upon without speaking to your accountant, tax agent or financial adviser depending on the advice.
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