Small Business Challenges and How Financing Helps | Fora Financial Blog
5 Small Business Challenges and How Working Capital Helps
January 16, 2020

5 Small Business Challenges and How Working Capital Helps

Running a small business isn’t for the weak of heart! You’re responsible for managing finances, hiring and overseeing employees, providing quality customer service, and ensuring the quality of all areas of your business. And these are just a few examples!

With so much responsibility, small business challenges will arise, and many of them require additional financing (such as a term loan or business line of credit) in order to be resolved. That’s where additional working capital comes in! Having access to more financing can help your business overcome hard times while building a better future.

The Top Challenges That Business Owners Face

As a business owner, you’ll likely face challenges on the road to success. Not having necessary capital will only exacerbate these issues further. 

In this post, we’ll detail five common small business challenges, and reveal how working capital from an alternative lender can improve your business’s daily operations, regardless of industry.

1. Limited Cash Flow

Running a small business entails paying for a wide variety of consistent costs. These operating expenses can be paying rent and other bills, purchasing inventory, compensating employees, in addition to other operating expenses. These costs can add up quickly, especially when you have other monthly payments make. This is why many business owners find themselves lacking extra cash flow for last-minute costs.

For instance, maybe you run a restaurant, and an oven suddenly breaks. Or you own a retail store, and you’d like to invest more money into a marketing campaign. On top of these initiatives, you also have to pay rent and ensure that you meet payroll, among your other monthly expenses. Without working capital financing, you won’t be able to execute these plans that are necessary to your success.

By applying for additional working capital from a recognized financial institution, you’ll be able to save some of this financing for when your business is in need! That way, you won’t have to worry about taking away funds from certain expenses to afford emergency costs or growth plans.

2. Overworking Staff Members

Having happy employees matters when running a small business. If you’re short-staffed, your employees’ performances will likely decline. Don’t risk overextending your staff, or they might look for a new job elsewhere.

In addition to overworking employees, being understaffed can also affect your operational productivity. It’s exciting if your small business is receiving an influx of business, but it’ll be hard to manage if you don’t have enough employees to serve your customers. Apply for a small business loan, and you’ll be able to hire some new faces to join your growing team.

3. Having Broken or Outdated Equipment

It can be extremely stressful to have your business’s equipment or tools break. Even if the equipment isn’t broken yet, you might be working with outdated equipment that isn’t performing as it once did.

By neglecting these repairs or updates, the quality of your service or products may suffer. Due to this, your business would benefit from additional working capital to replace broken equipment or afford regular tune-ups.

4. Increased Rent and Physical Location Costs

If your business’s physical appearance deteriorates, it may affect your sales. Most likely, patrons will prefer to visit a competitor that has a better, more attractive business location. If you’re in this situation, it might be time to move or invest in a makeover for your store.

In addition, rent increases can cause financial issues. That’s why working capital for small businesses can be a lifesaver. You’ll receive financing in an amount that reflects your business’s needs so you can pay for physical maintenance, rent increases, or moving costs.

5. Limited Resources to Invest in Marketing

Marketing is especially pivotal for small business owners, as they need to keep existing customers engaged, while recruiting new ones. However, many small business owners want to advance their marketing efforts, but don’t have the means to make it happen.

A successful small business marketing strategy can include anything from online advertisements, promoted social posts, or printed flyers. If you’re interested in improving your marketing plan, first reflect on what’s working for your business and what isn’t. Then, you can determine the marketing tactics you should be investing in. Also, don’t disregard new marketing ideas because of financial needs; pursue a working capital loan and start promoting your business!

After reading about these small business challenges, which ones resonated with you? Perhaps you’re ready to purchase new equipment, invest in more inventory, or want to hire and onboard new employees. Applying for working capital financing can help your business accomplish goals, and have cash available for trying times!

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Fora Financial

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.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].