These are the most common obstacles entrepreneurs face after launching their business.
The business of your dreams is up and running – and it's challenging enough without adding one more thing to manage or figure out. If you're striving to learn how to run a sustainable, successful small business, it will take effort. Once you understand the most common obstacles that arise in the first couple of years that your business is up and running, you can plan ahead to not let them take you down.
Here are six of the most common problems small businesses face and how you can overcome them.
1. Lack of cash flow
When you're running a business of any size, you can never have too much cash. However, you can definitely have too little. According to a recent report, 67 percent of small business owners report lack of capital as a major challenge. It's unfortunate but true: Entrepreneurs have a difficult time getting access to capital when they need it.
The solution for cash-strapped entrepreneurs is to find some options and figure out which works best for the business. Traditional business loans and 401(k) business financing are both options to learn more about. If you'd prefer not to go the financing route, you can aim to try to keep that hard-earned cash in your pocket. Start by projecting cash flow for the year, month and quarter to help you know where you stand. You can also improve receivables by giving incentives to your customers and clients who pay them on time.
2. Too few hours in the day
If it seems like the clock is moving in fast forward, you're like a lot of other small business owners out there. The constant interruptions, from phone calls to emails to meetings and last-minute deadlines, pose challenges for entrepreneurs. Not to mention the fact that you're wearing multiple hats. Want to combat the numerous time drains that suck the hours away?
Take back your time. Time can fly or drag, and it's based on what you're doing. Take that concept into account as you plan your schedule. Track the time you spend accomplishing specific tasks and manage that time to eliminate the minutes lost on unproductive thoughts. Book time with yourself so you can focus on your top priority projects, and don't be afraid to avoid distractions, such as not answering emails and phone calls.
3. Unforeseen roadblocks
You never can predict when the unknown will happen. Events like a recession or a hard Brexit are somewhat unpredictable and scary for small business owners. Budget constraints and reduced spending power make it tough for a small business to thrive. Poor sales and economic uncertainty are challenging, but you don't have to let these events sink your business.
If a time comes when your business needs to prepare for a recession or hard Brexit, try not to panic. Go ahead and be proactive. Now is a good time to evaluate and eliminate debt. Consider downsizing and do what you can to reduce overhead costs to free up cash. As long as you manage your business effectively and focus on providing high-quality customer service and products, your business can survive unforeseen roadblocks and come out stronger than before.
4. Trouble hiring and retaining excellent employees
It's not too hard to hire a few people, but it can be if you want top talent to be part of your team. While you may have an interested prospect, it isn't always easy to agree on a salary. And even if you do, you never know how long someone will stay with your business. Many small business owners find employee recruitment and retention to be an area of struggle. There are various reasons that employees may not want to work for your business or leave the position after a few months. Some of these reasons are within your realm of control, but some are not. Even if you're unable to change the circumstances, you can figure out how to best navigate the situation.
Just like you learned how to create a customer referral program that showed your customers you appreciate them, you need to show your employees how much you appreciate their hard work. When you hire someone, offer a robust salary and benefits package. Ensure you're competitive in the industry if you want to attract and retain top-notch talent, and do everything in your power to keep those employees stay content.
It's also a good idea to provide recognition to employees, such as extra time off work and gift cards. Make sure to offer mentorship program and encourage work-life balance for employees. Aim to promote from within if possible and always strive to have a line of open communication.
5. Not savvy at marketing
Marketing can seem really overwhelming if you don't have a degree in it. This is why many small business owners consider marketing a challenge. However, excellent marketing is vital to the success of your small business, so you have to prepare yourself to take on this challenge or pass the baton to someone who can.
If you aren't a social media whiz and don't consider yourself to be a skilled writer, don't worry. There are a lot of people who are good at these tasks and they can help you. Seek out professionals, and remember that you can't do it all. It's okay to be an entrepreneur who excels at running a business and to pass on tasks that aren't your strengths.
6. Navigating state, federal and government regulations
Small business owners often fret when it comes to abiding by the many regulations – federal, state and industry regs. The long list of regulations that are subject to change make this an ongoing challenge.
First, you need to decide the structure of your business. Once you make that decision, you need to ensure you understand topics like federal and state taxes, workers' compensation insurance, unemployment and sales tax. Reach out to experts for guidance along the way.
There are some major challenges that come along with the rewarding journey of entrepreneurship. You may or may not encounter these issues and trials, but in case you do, it's always smart to be prepared. Now is the time to get out there and show the world that your business is not going anywhere but full steam ahead.