3 Common Small Business Struggles and How to Overcome Them
A whopping 5 million small businesses opened their doors for the first time in 2022. As the COVID-19 pandemic gradually becomes a thing of the past, more and more people are venturing into the business world – and with good reason.
Starting a small business is a rewarding experience. You become your own boss and gain greater control over your financial destiny.
Unfortunately, running a business is rarely a rosy affair. Far too many small enterprises will collapse within a few years of launch. That’s because owners encounter several small business struggles.
If you’re a new business owner, getting familiar with some of the most common challenges can help make you better prepared to face them. Read on to learn more about what you’re likely to encounter.
1. Customer Acquisition
Table of Contents
You need customers to stay in business. You need more customers to grow the business into a large corporation.
However, many small companies often struggle to acquire enough customers. This results in low sales, a situation that can lead to business failure.
Some businesses end up with this problem simply because the proprietors didn’t validate their product/service idea before entering the market. But even with a validated idea, a business can struggle to attract customers because the market is too competitive and there are dominant players.
When doing market research, don’t just focus on potential demand and the size of the consumer market. Analyze the competition as well and establish whether you can wrestle them and acquire a sizeable market share.
2. Cash Flow Issues
More than 80 percent of the small enterprises that fail attribute their failure to cash flow problems.
Here’s the thing. Cash flow is the lifeblood of your business. When the flow becomes erratic, financing day-to-day operations can be a problem.
So, what causes poor cash flow?
In most cases, it’s poor sales. If customers aren’t buying what you’re selling in good numbers, your revenues will take a hit.
You can also develop a cash flow problem if you’re overspending money on unnecessary things. For example, if you move to a bigger commercial space even when your business doesn’t really need it, you may put a strain on your business finance, especially if revenues decline.
The key to proper cash flow management is to keep operating costs as low as possible while focusing on increasing revenues. A business coach can also help you develop a capital management strategy that works for your company. You can search for an online business coach if that’s a path you’d like to pursue.
3. Employee Recruitment and Management
Hiring and managing employees has always been a challenge for many small business owners. Most owners lack the expertise to identify and recruit the best talent, and finding employees can be difficult in a tight labor market. Competing with bigger companies offering better compensation packages can also prove to be a big hurdle.
From early on in your business, it’s important to let the experts handle your recruitment. This is a function you can outsource to a staffing agency, for example. That’s the best way to gain a competitive advantage in the labor market.
Beat These Small Business Struggles
These small business struggles are every entrepreneur’s source of stress. They’re not unbeatable, though. As long as you’re well-armed with information and tips on how to overcome them, you’ll come out on top.
Running a successful business is hard work, so keep reading our blog for more advice and tips.
Last Updated on March 1, 2023