Five Fears that Challenge Small Business Owners
In this post, we’ll list common fears that you may face as a business, and provide advice to help you survive and grow your business ventures.
Not having enough money
It can be stressful to have financial responsibilities to tend to, but not have enough capital to afford them all. To purchase inventory, update equipment, pay rent and employees, among other costs, you may find yourself in need of additional working capital. Even if your business is lucrative, you still may require extra financing to afford all your business necessities.
One option is to pursue loans through the U.S. Small Business Administration (SBA). You could also apply for financing from a working capital lender, which is a quick and secure process as well. It can be worrisome to be low on cash, but it is encouraging to know that there are options available!
Having a low credit score
If you’re in need of financing, your credit history could be a determining factor in whether you are approved for a loan. You may not check your credit score frequently, which can be detrimental to your business, especially if it is lower than you expect.
If this is the case, you shouldn’t immediately fret or give up. In most scenarios, having bad credit may not prevent you from being able to get a loan. Still, you should take the necessary steps to raise your credit score. Pay your bills on-time, pay off outstanding debt and limit opening outstanding debt. Before you know it, poor credit will be behind you!
Losing strong employees
Another business challenge for entrepreneurs revolves around retaining valuable employees. Hiring the right team members can be a challenge as the recruiting process can be very time consuming. Once you’ve hired the right employees and invested in their training, you may worry that eventually you’ll lose them to a different company. That’s why retention is a business challenge that you should not take lightly.
While offering wages that are high enough so they are competitive may strain your budget, you may find that not doing so could hurt your retention efforts. Consider this finding by the Center for American Progress; the typical cost of turnover for positions earning less than $30,000 annually is 16 percent of an employee’s annual salary. If you do not fairly compensate your employees, you may cause yourself more stress later on when they quit!
Not outselling the competition
As a consumer, you may welcome the arrival of a new Walmart in your neighborhood. You may not realize that your local corner grocer won’t be so happy, as it could lessen their sales. This is another business challenge that owners often face, and you must be prepared to handle it.
One of the ways to deal with small business competition is to establish an exclusive relationship with a local supplier or distributor, suggests The Real Yellow Pages. The site points out that with strong negotiation, business owners can ink exclusivity agreements with specific suppliers. In exchange for the owner only getting their goods from that supplier, that supplier agrees to sell only to that business owner.
Another way to outshine your competitors is to focus on delivering the highest level of customer service. While big-name brands may have advertising efforts and large staffs on their side, you can provide your patrons with personalized service that these bigger companies can’t always guarantee.
The elephant in the room
When the National Federation of Independent Businesses (NFIB) last looked at high on the list of anxieties related to government regulations.
Since Donald Trump was elected president, business confidence levels have risen as many believe the new administration will do away with burdensome regulations. Whether it be EPA requirements, or Obamacare mandates, small business owners have complained that these rules hinder their efforts to expand.
In the latest measure of small business sentiment, the NFIB found that its small business optimism index posted another historically high reading in April. However, expectations for future business conditions plunged, indicating that business owners were shaken by Congress’ failure at the end of March to repeal and replace Obamacare.
The provisions of Obamacare have been a significant business challenge. Owners charge that they can’t hire as many people they need without having to cover healthcare costs that they can’t afford.
We provided just five of the challenges that business owners like you face, but of course there may be other stressful times depending on your sales, industry and other factors. Still, you’ve made it this far just by creating a marketable business. Addressing business challenges such as funding, competition and regulatory issues, can give you the necessary footing to deal with just about anything to be a successful business owner.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.