Any small business owner knows the challenges and difficulties of running an effective small business; managing cash flow, hiring and firing employees, maintaining customers and staying relevant are just some of the many hurdles. Although there are more challenges out there then most business owners can count, this blog post will look at the top 5 challenges all small business face and ways they can overcome them.
1) Cash Flow Management
According to the Small Business Administration, “Inadequate cash reserves” is one of the most common causes of small business failures. Not being able to pay bills or paying vendors in a timely manner can spell the end of any business. Cash flow issues is not just a problem for businesses with low sales but can also be a problem for businesses with a healthy bottom line.
For some simple ways to improve cash flow click here.
2) Not Enough Hours In The Day
From dealing with customers and employees to handling the administrative task of the business, there seems like there is never enough time in the day to effectively run a business. Many small businesses will fail because the owners will become exhausted with the amount of work it takes to handle every aspect of running the business. This is especially true for sole proprietorship who have the burden of running the show by themselves. Business owners need to be strategic and be willing to pass off work to new or existing employees as well as find ways to cut down the time it takes to do daily task.
For some simple time savers when using Quickbooks click here.
3) Increasing or Maintaining Sales
Many small business owners find it difficult and even impossible to grow the company’s sales. The first 6 months of any small business is one of the most crucial times especially since the business is running on borrowed and invested money to keep the operations going. With fierce competition and fleeting customer attention, small business owners seem to have trouble staying relevant enough to increase or even maintain sales growth. With traditional advertising becoming more and more costly, owners must try alternative cost effective channels of advertisement to bring in new customers.
For creative ways to advertise using Snapchat click here.
4) Getting Financing
For many small businesses short term loans and lines of credit are necessary to maintain operations. This is especially true for businesses who have a large amount of sales on credit or who don’t get paid until a project is complete. Small businesses need to maintain the appropriate amount of credit to use when business is slow and pay off these balances when business picks up or customers start paying. The hardest part though is applying for these loans and getting approved by bankers.
To learn how to create a pro forma financial statement for a small business loan click here.
5) Keeping Up With Regulatory Compliance
One of the biggest challenges small business owners face is keeping up with regulatory compliance. This includes business registration, filing timely sales tax returns, filing timely business tax returns and maintaining industry specific federal and state requirements. The cost of failing these requirements can be costly and can shut down the business entirely. By hiring a CPA a small business owner can avoid these headaches and run their business without worrying about these regulatory challenges.
To find out if your online business should be collecting sales tax click here.