5 Challenges Keeping Small Business Owners Up At Night (And How To Handle Them)
Here I am sitting in the garden writing this blog and reflecting on a question that many small business owners are asked. Here it is once more! “What’s it like to have the liberty to work from home?”. I'm sure if you're one of these fortunate people like me and reading this, you'd probably give a similar response as I do. Of course, I'd reply that it’s great because I don’t have to deal with the jam-packed roads with thousands of other commuters every morning and evening! Then we leave it at that…
The Realities of Business Ownership
We tend to avoid sharing all the bad parts of the home worker’s story - nobody wants to hear it! Plus we’re too proud to stop people from thinking that we have it good against the typical 9 to 5 office job. What we don't say to people enough is that everything great is kindly accompanied by its challenges.
With times changing and the amount of new aspiring entrepreneurs on the rise, coming through with a painted dream of "easy life". I believe it is important that we face these challenges with confidence and know that we are not alone in the "hustling" world.
Whether you have been in the game for over 5 years or less than 5 weeks, are a sole trader or in a partnership, own a cafe or act as a freelancer, we all have to deal with them! Here I'll share with you 5 of these challenges with a couple small tips and some resources.
Here they are:
Scaling your business
This is rightfully at the top of the list. If you were to ask any business owner what worries them, I'd say 8 out of 10 times (this is a guesstimate) they would start off by saying tax. With some of them not knowing what the future tax rates may change to or knowing if they'll have enough money to pay it off (we'll talk about the importance of cash flow after). Being paid a visit by the taxman every financial quarter at your own expense is never ideal but we have to deal with it!
Since there are so many tools out there such as Xero now which enable us to keep on top of things ourselves, you've probably been taking care of your accounts yourself or with a bookkeeper. A way of overcoming the stress of tax or at least put it at ease, it is recommended to have a good accountant or tax preparer on your side. If you normally prepare your own taxes, it may be time to acquire a professional who has experience with small businesses in your industry. They can help benefit you the most with tax breaks and invaluable advice to prepare for following tax times.
One of the biggest challenges for small businesses is maintaining constant cashflow. You've probably heard of the saying, "Cash is king", we need to preserve our capital to pay the bills keeping the business open such as electricity and software; to ensure payroll is paid out, whether that is to employees or just yourself; to pay suppliers for your products such as coffee for the cafe owners, etc... You get the picture. But with all of these bills in mind, how can you keep more cash at hand? That is the question.
The Fear of Debt
Although we have heard that cash is king, what many of us haven't heard of before is "Credit is power". I watched an interview (which I can't seem to find) with a small business expert, Tom Maoli, who changed my view on debt. "If you are afraid of debt get out of business. Debt is your friend if it is used properly.", he says. He is referring to the use of loans from banks and credit margin with your payments. The best way to be able to make use of this and be accepted by banks is by keeping tight track of all your expenses, on a weekly or even daily basis preferably. Paying off debt with your credit cards or other in a timely and responsible manner will prove your value to banks. When a finance manager can see your literacy and your amazing responsibility with cash, they'll be more likely to assist you.
Remember. The main goal here is to keep capital to support us in any emergencies to keep our businesses alive.
I know the pace of which technology is evolving can be scary - the trends that appear with voice automation, chatbots, analytics, knowing which tools to use, etc... Don't let it overwhelm you, after all 'The Matrix' isn't quite a reality just yet!
You and I both want to be ahead of our competitors, right?
Keeping up with Technology is vital for any business to stay ahead of the game. So make sure you keep up to date with the evolving digital world. You can do so by finding a reliable IT publication website or journal, make sure to read it regularly. You'll then be aware of any emerging trends that may be reaching your industry and even realise that some might not even have any major effect on your business! Depending on your industry and how long it's been since your last technology upgrade, if it has been a while, it may be worth hiring an IT specialist to give some tips and advice or just simply make your own research. The internet (our greatest part of tech!) is at your fingertips!
Oh, and if you haven't a website, it's about time you make one. According to Telstra Small Business Intelligence Report over half of small business owners don't own one and the research suggested that 62% of customers are stopped in their tracks when they see a lack of online presence from a business.
Whether it's finding new clients, retaining clients, or even pursuing payment from a client. There is always going to be at least one thing which we'll worry about.
In the ideal world, prospect calls us, we talk about their project, they become our client, we're happy, they're happy, they pay us. If only every client could be like this! Unfortunately, it's not always the case, however, there's no need to get yourself into a rut in your own mind about it. There are always ways to solve things without the dispense of your sanity! (That's for the people in their cars at 7 am are supposed to feel - not us!).
Attracting and Retaining
Attracting and retaining clients in this modern day is increasingly difficult with the amount of competition and options the consumers have on offer to them. As consumers, we are always seeking out the 'fastest cheapest best quality' service or product we can get our hands on. Thus as a small business, having an online strategy is super important. From having a mobile-friendly website that is attractive and easy to use, through social media, to sharp customer service. Doing this will provide the competitive edge you need to keep your new clients wanting more.
As a small business the chances of clients taking advantage of you will be higher. Knowing the best ways to pursue payments from valued clients is especially important. We want to be firm but also withhold a good relationship with them without being taken advantage of, nor do we want to be left in a difficult position with empty pockets. (I'll talk more about this in another blog which I will link to here).
Scaling your business
So you've built your list of clients and the demand for your amazing services is through the roof. Well done, you've made it! If you want to feel like your still an employee yes. That's not what we want though is it, we want to carry on feeling like a business owner. To do this, we need to scale. However, finding the right people to assist you and eventually replace you can prove to be difficult.
Now how do we scale whilst maintaining the quality of our service that we have been working so hard on?
First of all, you need a plan. Are you looking to grow and eventually sell the business? How big do you want to grow? Be international or stay national? Knowing your end goal and why it's important to formulate the right strategy to get there. I read the other day, Starbucks this enormous chain for quality coffee is all privately owned. They never franchised - It's possible with the right strategic plan! Remember, scaling is about getting better, not just bigger.
Growing your business gives you the chance to employ great people to add quality to your business. There is no great company with no great employees. Karen Ripoli in Hit Virtual shares some great information on growing a team here. Yet a business will never grow to be great if our great employees keep leaving. So we need to know how to retain them. You want to make them feel like they are part of a worthy business and not just another cog to keep it running.
I hope this post provides a little more insight into the worries of small business owners and understanding that they don't have to keep us up at night when we know what they are and find the right support! An important part of not falling into overwhelm is great outsourcing. If you need help contact us here.