If you get hit by a car, is your business still producing income the next day? In the daily grind of living, it is crucial more than ever to be obsessed with what you’re doing. If a single client makes up more than half of your income, you are more of an independent contractor than a business owner. To avoid this problem, small business owners must either be heavily capitalized or able to pick up extra income to shore up cash reserves when needed. (In advertising, honesty truly is the best policy. It’s unbelievable. This may mean not being able to personally manage every client relationship or not inspecting every widget. As demands for your business increase, without the proper systems in place, you’re more likely to come up short and fall short of those demands. Problems such as inexperience, business size, and the lack of resources can get in the way of an entrepreneur’s success. Therefore, many small business owners find themselves tied to these habits to the detriment of the company’s development. A credit union is a member-owned financial cooperative that is created and operated by members and shares profits with owners. That is why obsession is a critical component; when you’re obsessed, working 14-hour days isn’t as big a hassle. Our mission is to bring you "Small business success... delivered daily.". of hiring new employees, unfortunately, keeps rising. However, it is generally better for a business to have a diversified client base to pick up the slack when any single client quits paying. A microenterprise is a small-scale business that employs a small number of employees—if any at all. Don’t let your business rely on one client – it’s a recipe for disaster. All of that risk is transferred from the larger company to you and your employees. The cost (equipment, benefits, taxes, bonuses, etc.) All rights reserved. This arrangement can work if your main client has a consistent need for your product or service. Therefore, many small business owners often find themselves tied to these habits to the detriment of the company's growth. When your small business is home-based, home office deductions are vital for keeping profits high. The National Federation of Independent Business states that when you invest in your business, Section 179 allows you to instantly deduct the cost of that investment. Without obsession, you’re more likely to let your small business fold instead of fighting for it. Many business owners—even successful ones—get stuck working much longer hours than their employees. Not only to save your own hide but to provide the service your customers expect; when they see that your business is “the real deal” your ads claimed, you’ll dramatically increase the number of lifetime customers who buy again and again.). A small business needs both. And yet, some of these topics are often put in the backburner. It’s always wise to judge the profit against the cost.eval(ez_write_tag([[336,280],'smallbiztrends_com-large-mobile-banner-1','ezslot_4',146,'0','0'])); As a small business owner, realizing this one insight is essential for maintaining a calm head: your competitors face the same problems as you do. If one big client fails to make a payment, your small business may not be able to cover its bills. Are You Being Spied on While You Work from Home? If you have any clients who are responsible for more than half of your business income, it’s time to a) generate more clients or b) work better deals for your other clients. Growth should never be the enemy of quality. There are many standard challenges every business faces, whether they are large or small. In this instance, the challenge occurs when the copywriter enjoys artistic license too much… and puts fraudulent claims in the copy. Here are the five biggest challenges for small businesses. It’s important to find the right balance between working long hours and business success. "Small Business Trends" is a registered trademark. While most larger companies have enough cash flow to keep up with payroll and keep the lights on, small businesses are often in a less stable situation. The Federal Trade Commission applies these regulations to both online and print advertising. The Clean Air Act of 1990 forces you to remove air pollutants, and your vehicles’ contribution to smog, gas and other chemicals that crush the ozone layer. Based on prior research by Ansoff (1965) and Chrisman and Leslie (1989), the classification system used to categorize business problems included administrative, operating, and strategic problems. Required fields are marked *, Founded in 2003, Small Business Trends is an award-winning online publication for small business owners, entrepreneurs and the people who interact with them. Unfortunately, it is usually that level of personal engagement and attention to detail that makes a business successful. Below are some of the biggest problems faced by small businesses and what you can do … If you are going through any of those problems, here’s a good news. Lack of experience running a business causes small-business owners to make avoidable mistakes common to thousands of entrepreneurs. Starting a business is a big achievement for many entrepreneurs, but maintaining one is the larger challenge. The uncertainty of the economy’s condition cannot be overstated, and must be treated with the utmost respect; doing so keeps you from taking unnecessary risks. The 10 Biggest Business Problems for Small Business Owners . Under current U.S. law, the corporate tax rate is currently 15% on the first $50,000 of taxable income. A small business owner should not create a situation in which the business could not continue in their absence. There is a large middle ground … Finding a pace that keeps the business humming without grinding down the owner is a challenge that comes early (and often) in the evolution of a small business. Nothing can hold a business back like money problems. Not even Wall Street stockbrokers—or so-called “masters of the universe”—do not truly know how the economy is going to pan out. For many small businesses, having a client willing to pay on time for a product or service is a godsend. They’ve done research on everything — from job openings to labor markets, from capital spending budgets and the cost of inflation; on a monthly basis. Data Surveillance During Remote Work Leaves Businesses Vulnerable, Why Double Opt-In Isn’t Counterproductive for Your Email Marketing, 8 of the Top Apple Watch Apps for Small Business Owners, How to Pick the Best Business Partner for You, Use These 5 Financing Options for Your Bootstrapping Startup, Save 25% on Cybersecurity for Your Business, Get your business ready for Black Friday with a 25% discount on Malwarebytes for Teams, This Small Business Week, Reflect on Policies That Go Hand-in-Hand With Small Business Success - RightWisconsin. Bar-none, one of the most challenging aspects of running a small business comes from managing health care for your employees. While “Obamacare” is undoubtedly beneficial for the health of workers, it’s often the business owners that receive the financial blow. Having professional help with money management frees up a small business owner to focus on operating concerns. In time, a business may boom beyond growth expectations.