How to Solve 11 Biggest Hidden Small Business Problems
“Most great people have attained their greatest success just one step beyond their greatest failure” Napoleon Hill, the author of Think and Grow Rich.
When starting your business, small business problems are unavoidable and it requires you to set your best foot forward. For most startups, the problem is in identifying the not so obvious challenges and tackling them.
So what are the 11 biggest hidden problems in your small business that you need to be aware of?
1. Undiversified Client Base
A small business should not allow itself to be reliant on one single client. It’s too great a risk to take. If one single client contributes to more than half your income, you are operating as an independent contractor instead of a business owner.
Diversifying your client base is paramount for your business growth. It safeguards you from a sudden destabilization should your client dash off to your competitors. This arrangement is only safe if you are sure that your main client has a consistent need for your product or service.
Whereas for many small businesses having a client willing to buy in bulk and pay on time is a dream comes true, you should never settle there.
Better have a diversified client base for your business from which you can pick up the slack when any of your clients stops business.
2. Cash Flow Money Management
You need plenty of cash to cater for the needs of your business. More importantly, you need the perfect traceability of your incoming as well as your outgoing cash.
If you do not put measures in place, your business and personal finances will get mixed up, and eventually one will prove a capital drain to the other.
You have numerous alternatives to avoid this problem from online invoice software to better budgeting systems and effective cash flow management. You must keep strict track of your money, where it is coming from, and where it is going.
3. Founder Dependence
How independent of you is your small business, would it continue to generate an income should you have a personal emergency? If your business cannot operate without you as the founder, it is working with a deadline.
Founder dependence is a risky place for your business. Your business operations should be independent of you as a person.
You need to let go of certain functions, decisions, and responsibilities as your business grows. To start with, you need to give over more control to your partners or employees. It is a difficult place since you may have to compromise on the quality of work produced until the new team learns. However, it is a worthwhile endeavor since it assures your business longevity.
Unlike a job, when you are working on your business you do not protest against long hours of work or unpaid overtime. As good as it is for you to diligently work on the success of your business, therein lays a risk. You are bound to be worn out from the long hours of work and the constant pressure coming from your business.
You get stuck working longer hours than your employees and are in constant fear that your business will stall in your absence. However, what you really need at certain times is to take some time away from your business to recharge.
Fatigue can interfere with your objectivity in decision making and to grow your business you need to always be looking at the bigger picture and not reacting to situations.
5. Quality vs. Growth
Balancing the quality and growth of your small business requires calculated moves. Even when your business is not dependent on you as the founder, a time comes when the growth experienced outweighs the quality benefits.
Whether you deliver products or services, you will soon need to sacrifice to scale up. It means you may not be in a position to directly manage every client relationship or inspect every single aspect of your business.
However, there is a unique level of personal engagement and attention to detail that you as the founder brings to the table that steers the success of your business. It is therefore not easy to let go of some aspects of your business to allow it to grow.
The balance between perfection and unnecessary obsession with quality makes all the difference. You need to navigate your problems and come up with business solutions that strike a compromise to allow growth and protect the brand.
6. Staying Passionate
In the daily grind of life, you need to be sure and steadfast, never lacking in zeal for your business. It is the only way you can protect your brand and maintain a high quality of products and services rendered to your customers.
So as you disentangle yourself from some aspects of your business to avoid founder dependence, your interest needs to remain or go higher.
If at any one point your customers have a sloppy experience, you will have inspired them to take your business elsewhere, and where else if not to your very competitors?
As your business continues to grow, you should engage in more business consulting and ensure you are as passionate about your business as when you approached your first client!
7. Hiring New Employees
So now that your small business is balancing growth and quality and operating independent of you, you are faced with a new problem: Hiring new employees.
It is one of the most common business problems. It is especially the case due to the involved cost.
Hiring new employees means you need to invest in more equipment, pay for more taxes and benefits. All these facets come into play and the cost of hiring new employees keeps rising even before you outline the salaries needed for different positions.
You need employees and an effective management team to run your small business successfully.
8. Turnover Business Problems
After you have hired a team of employees and management and your business is running independently of you as the founder, watch out for the turnover hurdle.
You need a fully functional and effective team to meet all your customers’ needs and keep your brand top notch.
The greatest threat is where your business is running independent of you but it is now dependent on your team.
So you need to build up a reliable management team since the highest turnover rates are directly linked to bad management.
9. Process Management
Your management team determines the best process for your team. It could be through dictating or building consensus. However, the decisions made determine what things get done, the value attached, and how they get done.
You need to enable and empower the strengths of your team to ensure they pick up the button, rhythm, and heartbeat of your small business and run with it. Your process management should be centered on the strengths of your team since this has proved to be significantly beneficial.
Adding heavy processes and bottleneck decision making through your management team only works to slow down your productivity. Proper process management is critical in product releases and timely customer issues resolve.
10. Unequipped Sales Department
The growth of your business needs to be sustained by a vibrant motivated sales department which determines how much you sell and in return how profitable your business is.
As you grow and tackle your business problems ensure your sales department is not just average. It is the surest way to attain and defend an unopposed position among your competitors.
Equip your business with an optimal sales department through necessary support. Your sales team will fail if you do not give them critical tools such as training and mentorship, customer service support, high-quality products and services, and a workable follow-up plan.
11. No Customer Retention Strategy
As much as you channel all your energies towards diversifying your client base and equipping your sales team, you must equally develop a customer retention strategy. One of the biggest mistakes small business owners make is focusing on acquiring new customers and doing nothing about customer retention.
Now that you have a pool of customers giving your business a ready market for your products or services, you need to guard it relentlessly. Ensure customer satisfaction, deliveries within stipulated timelines, and never over promise and under deliver.
Your customers are the lifestream of your business so you need to retain them. It is better and cheaper for your business to retain its customers than lose them to acquire new ones.
Business problems are easier to tackle when you know exactly what you are dealing with. So do not be laid back enjoying the seemingly good of your small business, watch out for these biggest yet hidden problems.
Make a distinction between you and your business, manage your capital, remain vigilant, grow your team, acquire and retain new customers, and put in place a remarkable structure and process management system.
Avoid the hidden traps and give your competitors a run for their money!
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