Running a small business is an endeavor fraught with problems and learning experiences. Being a small business owner is so challenging that 20% of small businesses fail in their first year of operation.
Small business problems can mean big headaches for their owners and partners. One of the best ways to deal with potential problems that your business may face is to know about them ahead of time.
The following 7 small business problems plague business owners across the nation. Learn about them so you can watch out for them in your day-to-day operations.
- Logistics Issues
Small businesses often don’t have access to extensive multinational supply chains. They also don’t have the logistics resources corporations use. Nipping any logistics problems in the bud right away should be a primary concern.
Do this by getting a solid logistics strategy off the ground before expanding your business. Establishing a strong logistical foundation will help your business weather any supply-chain-related storms that come your way.
No matter what your small business does, moving your raw materials and products from point A to point B is the backbone of any successful business strategy.
Most small businesses don’t have the resources to own trucks or other freight resources outright. Partnering with a third-party freight company or logistics operation may be your best bet in handling logistical quandaries.
- Securing Capital
Large multinational corporations have access to vast reserves of liquid assets and cash supplies. Small business owners are not as fortunate and often operate in the red during their initial opening phase.
Until your small business begins to turn a profit, securing capital can be a challenge. Unlike large corporations, you can’t rely on your shareholders or the government bailing you out.
Some successful business people recommend not starting a business unless you have cash reserves that can carry you through the first few years of operation.
This is because much of the time your business will lose money for the first few years. That is until it establishes itself in the marketplace and secures its clientele. Never start a business without adequate capital to avoid failure.
- Establishing Work/Life Balance
Any small business owner will tell you that their day of work is never really “done”. When you run a small business, you are always on. There is no punching out and enjoying a well-earned weekend.
In some cases, all aspects of your business are on your shoulders at all times. This is the truest for small start up’s and single-person operations.
During the early stages of establishing your business in particular, forging a work/life balance can be one of the many entrepreneurial challenges faced by small business owners.
Eventually, as your business grows and you get the hands of things it will become more autonomous. In the meantime, finding ways to keep your life separate from your business will always pose a challenge.
Just keep chipping away at the old block in the hopes of hiring some employees one day that can take some of the weight off your shoulders.
- Small Business Problems for Payments
Not all small businesses are large enough to accept all forms of payment. A lot of the time the only way an up-and-coming business can accept credit or debit cards is with third-party applications such as Square Space.
Integrated payment processors can alleviate many common payment problems. They allow your small business to accept many different forms of payments.
Use a payments processor to expand your business’s payment options. That way you can cater to a larger more diverse clientele. That will allow you to compete with the big box stores that already have these capabilities.
- Lack of Production Capabilities
Large corporations have vast manufacturing resources. This means they have the potential to produce large amounts of their products. The production capabilities of small businesses tend to be less extensive.
Small businesses may outsource many aspects of their production processes. Larger manufacturing outfits are often cheaper than third parties. Outsourcing is an inherent part of running a small business.
However small production capabilities or outsourcing have their problems. Lesser production capabilities mean many small businesses rely on small batch production.
This type of production can be more expensive. Small businesses may have no choice but to pass on this added expense to their consumers.
- Pricing Challenges
It is more expensive for small businesses to produce small batches of their products. This is because large-batch production is cheaper. This results in small businesses having to charge higher prices to consumers.
Many consumers will choose to pay a bit extra and support small businesses. Others may be so tight on money that they have no choice but to go with the cheapest option.
The competitive capitalist marketplace often favors those with lower prices. Surviving this competitive pricing environment is one of many small business obstacles.
- Reaching New Markets
Large multinational corporations have the advantage of being able to access many markets. Small businesses are not so fortunate.
Reaching new markets takes a certain level of growth that many small businesses never attain. Also when a small business cracks into a new market they are often at a competitive disadvantage.
Large businesses established in markets offer fierce competition. This can be detrimental for any potential emerging small businesses intruding on their turf.
In other words, large businesses have the resources to wage a financial war of attrition. They can price-gouge any small businesses found in their crosshairs.
A small business owner should always take these factors into account. Especially when developing their growth strategies. They should not attempt to get into competitive conflict with more powerful entities.
Rise to the Challenge
There are many small business problems that plague owners all across the globe. That being said, these challenges should only motivate you as a small business owner.
Rise to the challenge today by checking out all of the crucial business information on our site.