For entrepreneurs, running your own business offers rewards as well as challenges. Some issues, like reducing employee turnover and successfully building a brand, are at the top of many business owners' list of complaints—regardless of organizational size.
But small business owners have their own unique hurdles to overcome in order to succeed.
Read on to learn about the five biggest small business challenges... and how to solve them.
Challenge #1: Managing Money
While cash flow is an issue for many organizations, small businesses tend to be plagued by specific challenges such as clients who take their time paying invoices, expenditures that aren't exactly expected (surprise!), and outstanding bills that need to be paid.
For many business owners, these monetary demands can be easier to handle with a little bit of technological help. Consider online money management tools and software, budgeting apps and automated bill payment systems to lighten the burden. And don't be afraid to utilize professional tax and accounting services, as well.
Business lines of credit and credit cards could offer a cushion to protect cash flow. When used wisely, business credit could allow you to pay vendors on time, purchase materials and inventory, invest in marketing, pay your employees, and keep the lights on—even during slower months.
Challenge #2: Cyber Security
If you pay attention to the news, you've likely seen coverage of large data breaches affecting millions of customers. Organizations like Target, eBay, JP Morgan Chase, and Home Depot are just a few of the companies affected by cybercrime in recent years.
But hackers don't just target big business. According to Hiscox's 2018 Small Business Cyber Risk Report, nearly 1/2 of US small businesses were victims of a cyberattack last year.
Cybercrime can impact your business, your employees, and your customers, leaving you with mounting costs. Whether due to denial of service or web-based attacks, these malicious crimes can cause extensive — and expensive — damage. The average cost of a cyberattack to a small business is $34,604, and that amount increases to over $1M for larger businesses.
You can protect yourself against the high cost of a data breach or hack with cyber liability insurance for your business. In addition, take a proactive approach to cybersecurity: keep software up-to-date, utilize anti-malware and antivirus protection, and educate employees about cyber risks.
Challenge #3: Client Dependence
The old saying "don't put all your eggs in one basket" applies to many areas of life, including your small business' client base. Diversification is a key component to any organization's success, but it's absolutely essential for small businesses.
As a general rule, no one client should make up more than half of your income.
If you want your business to grow and be stable, you must invest time and effort into increasing your client base. Start by taking a look at your best clients: identify their characteristics and ask for their feedback. Use the information you glean to target new clients with similar needs and market your product or service to them as a solution to their specific problem.
Challenge #4: Marketing
Twitter. Facebook. Instagram. Blogging. As a small business owner, your time is valuable.... and keeping up with the latest marketing trends can definitely take time and money. But marketing is the answer to finding new leads and converting leads to clients, so it's definitely a challenge to face head-on.
You don't have to try EVERY new marketing trend–choose a few tactics to focus on. Digital ads can help searchers find you exactly when they're looking for your (or a competitor's) product. Promoting content on social media can help build awareness of your product/ brand. Email marketing can be highly effective. Choose a tactic (or two or three) and be consistent in your efforts.
No matter what tactic you choose, be sure you've got an up-to-date, responsive, modern website as the hub of your marketing activities. In today's digital world, a solid website is an absolute must-have.
Challenge #5: Burn Out
You care about your business and want it to succeed... and this often means long hours and stress. Add in the common fear that the business can't operate at its best without the owner there, and you've got a toxic blend that, over time, can lead to fatigue. Often, business owners end up working longer hours than their employees!
Finding that "sweet spot" in which both the business and the business owner thrive is key. Be sure to take time for yourself to rest and recharge so you can keep your enthusiasm high. Delegate tasks when you can, and empower your employees to take ownership and responsibility.
Find trusted allies, like financial professionals, insurance professionals, fellow entrepreneurs, and mentors to help you along the way. Thinking you need to do everything yourself is a fast-track to burn out. Surround yourself with a great team to avoid it.
While every small business is different and faces different challenges, these common obstacles can be overcome. From cybersecurity to marketing, you can take charge of your business with these simple solutions.