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Being a small business owner can be tough. Not only are you forced to compete against the bigger players in your market, you also have a noticeably more modest budget in comparison. The fact that the vast majority of small businesses close down in the first year of operations probably isn’t too much of a motivator either. However, you can brave through the initial phases of starting a business. And if you do, you will find that the lifestyle of a successful business owner is truly rewarding. If you’re determined to go down that road, here are seven challenges that lie ahead of you and what you can do to rise above them:
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1. Getting Clients
Even the biggest names out there don’t sit on their laurels; instead, they have people working to acquire new leads every single day. Understandably, you may not have the funds that they do (especially if you’re just starting out), so managing them correctly becomes of the utmost importance. But you shouldn’t just mindlessly try to get customers from just about anywhere either.
First, you need to determine where your potential customers are hanging out. Then, you need to come up with a message that will ring some bells with them. Try to envision a typical customer in your mind. Ask yourself these questions:
- What is that person’s level of education?
- What are their most pressing problems?
- How much are they willing to spend to fix them?
- Where do they spend the majority of their time?
By answering these and similar questions, you will be able to laser in on what your clients need and deliver relevant products and services. And, better yet, you’ll be advertising to the right group of people.
2. Cash Flow
Clients who don’t pay their bills regularly can be quite a nuisance. This could lead to cash flow problems. If you don’t have your funds readily available, how are you going to pay your employees when the time comes? There may also be a business opportunity that a lack of cash flow can force you to pass up on.
One solution to this is to track your money. Use a software solution that will make it easier to see how much you owe to someone, how much others owe you, how much you have to pay your employees, etc. This should be more than enough to see where you’re at. Moreover, companies like Invoice Financing Australia and their services will help collect on unpaid bills in a matter of days if not minutes, so you can resume your business operations with as little interruptions as possible.
3. Work-Related Pressure
Being in business can put a lot of stress on your psyche. Despite being passionate about what you do, spending long hours dealing with demanding customers can put a toll on your mental fortitude no matter how resilient you are. The more determined you are to make your business a success, the faster your mental reserves can be drained. In some instances, even taking some time off to recharge can instill feelings of guilt.
The problem with not resting enough, however, is that your mind won’t be functioning correctly, leading you to make rash decisions you’re likely to regret later on. Obviously, this is bad for business. The solution is to keep a steady work-life balance, even though your ambitions may nudge you in another direction.
4. Client Diversification
Have you ever heard the saying “don’t put all your eggs in one basket”? You probably have. But as acquiring new clients is hard enough as is, who has the time to think about client diversification, right?
The purpose of doing this—once you can afford it—is to diversify your sources of income. So if something were to happen to one source of cash, you can simply rely on the others until you find a suitable replacement. Also, more clients mean that you have more options. This gives you the freedom to turn down a project if something better comes your way.
5. Hiring and Managing Employees
Once you can afford it, hiring a helping pair of hands to lift some burden off your shoulders can truly make things easier. However, you always need to justify the costs of doing so, since the expense isn’t worth it otherwise. Hiring employees is always a comparison of profit versus expenses, which is a simple equation that will help you determine whether adding another member to the crew will pay for itself or not.
Managing employees is another challenge that small business owners often face, but since it’s quite related, it belongs to the same category. Simply put, you need to develop a system that helps you keep track of what everyone is doing and optimize the work process along the way. If the team is small enough, you probably don’t need all that, but you’d be surprised how quickly things can go out of hand once you start seeing some success in business.
Certain government regulations like GDPR can truly wreak havoc upon your financial well-being if you’re hit with a penalty for not adhering to them. But before you can make sure that everything is in order and that you’re compliant, you have to learn about every single regulation that may be relevant to your line of business.
After that, taking all the measures necessary to remain compliant is the next logical step. In the case of GDPR, to name one example, you need to make sure that your customers have given you permission to store their sensitive personal data. And even after they do, you must be careful how you approach the matter. As a matter of fact, you should use the highest level of encryption.
Once your business starts growing, some multitasking is a necessary evil. Sure enough, this gets somewhat easier by using tracking software and hiring more staff. However, at some point, you’ll probably have to deal with it one way or another.
The last thing you want to do is overburden yourself and lose your head in the process of juggling too many tasks at once. If you do, getting things halfway done is the most likely scenario that will end up happening. And you don’t want that, do you?
Overcome Challenges to Reach for Success
These challenges are the realities of what small business owners often have to face. But as the old saying goes, “smooth seas don’t make good sailors.” So you should always take challenges as an opportunity for development and growth. After all, most, if not all of them, can be overcome.