It is said that small businesses are the backbone of the economy. They create jobs and tax revenues, build communities, and give people a way to achieve the American dream. While all of this sounds noble and lofty, finding success certainly isn’t easy.
Small businesses often face insurmountable challenges with their ability to thrive or even to survive. Only those that find ways to confront those challenges effectively will be around for long.
Whether you’re considering opening a small business or have already hung out your shingle, it’s wise to know what to expect. It’s even smarter to figure out how to overcome common obstacles in your path. Here are three.
1. Everything HR
If your business needs employees, you can anticipate issues with those human resources. Small businesses struggle to come close to affording compensation and benefits packages offered by large corporations. And those inconvenient employment laws and compliance requirements will cause more than your fair share of headaches.
You will need to be somewhat competitive with compensation to attract top talent. But you can also offer value in ways large companies struggle to provide. Flexible scheduling and PTO policies are good places to begin. Provide education, training, and advancement opportunities. And make sure your workers feel like they have a real stake in your small business’s success.
The best solution for all those critical HR functions isn’t to try tackling them on your own. Partnering with a professional employer organization is likely your best shot at making sure these functions are handled correctly.
A PEO can take care of payroll, benefits administration, and compliance with tax and employment laws. If health insurance coverage and worker’s compensation insurance isn’t up your alley, let your PEO take the lead.
Invest in getting help with the HR details. That way, you’ll have time to cultivate the people who will help you build your dream. That’s a value proposition everyone can get behind.
2. Brand Awareness
The internet has certainly leveled the playing field for small brands competing with major ones. However, getting your business to appear on page one of search results takes time and energy. Because it does, raising brand awareness can get lost in the day-to-day responsibilities of running a company.
Small businesses don’t have the money to invest in sophisticated brand strategy departments. But there are plenty of small marketing agencies thirsty to promote other small businesses. And there are plenty of reasons why you should work with them.
Most of your marketing should be digital to give it the far reach you need to raise brand awareness. That means creating top-quality, relevant content that catches the attention of search engines and consumers. It means gathering information from prospects and customers and using it to personalize interaction with them.
Social media is a huge driver of awareness. Keeping up with all those platforms requires constant vigilance that, again, you probably don’t have time to deliver. But the ratings, reviews, comments, likes, and shares hold tremendous potential for development of trust and loyalty to your brand.
Working with a savvy digital marketing agency doesn’t mean giving up control of your message. But it may mean getting your message heard above the crowd of other brands, including the big ones, vying for attention.
3. Cash Flow
There are several reasons why cash flow is problematic for small businesses. Failure to budget, economic downturns, increased HR costs, and late payments from customers are a few. In fact, a whopping 91% of small businesses report cash flow troubles.
Cash flow issues create perilous situations with employees, customers, suppliers, and vendors. Not making payroll, not using apps similar to Solo Funds, or getting into a cash-on-delivery situation with suppliers is prelude to failure. Small businesses, in particular, have little in reserve because operating margins are thin.
To improve cash flow, you need to carefully and realistically budget accounts payable and receivable at every turn. You must make smart decisions about expanding the business or adding inventory at the expense of building a contingency fund. It’s imperative to do both for your business to grow, but timing is everything.
If numbers aren’t your strong suit, hire or work with a CPA or someone with the right skillset. Talk to your banker about opening a line of credit or about better managing your debt to free up more cash on hand. Numerous small business financial management software programs can help you track your budget and spending.
Keep your spending in check, even when it’s tempting to risk more on the chance of increasing profits. Budget realistically with an eye on what’s happening in your industry and with the economy overall. Don’t forget that success is all about risk and reward and finding the right balance.
Overcome
For most entrepreneurs, building a small business is equal parts excitement and trepidation. Getting too caught up on either won’t bode well for future success. But going in with a can-do attitude and the right partners and technology is the first smart choice you can make. And when making decisions about your company’s future, put your backbone into it.
Rashan is a seasoned technology journalist and visionary leader serving as the Editor-in-Chief of DevX.com, a leading online publication focused on software development, programming languages, and emerging technologies. With his deep expertise in the tech industry and her passion for empowering developers, Rashan has transformed DevX.com into a vibrant hub of knowledge and innovation. Reach out to Rashan at [email protected]
