Wednesday, December 16, 2015, AM | Leave Comment
There’s no way of getting around it—starting and running a small business is hard work, and it tests you in more ways than you can even anticipate from the beginning.
Whether you’re looking to start a small business, or you’ve just begun the process of establishing one, here are some of the biggest things that you’ll need to think about as you get your business up and off the ground.
Not enough capital is, of course, one of the main challenges that a young small business faces.
A business simply needs funding in order to keep going; this is why so many people who start businesses start by working other jobs while getting the business up and running.
Sure, the split focus adds to the difficulty of getting business booming, but really the only other alternative is being heavily capitalized from the start, which simply isn’t the case for everyone.
So navigating the money problem of a small business requires striking a careful balance between hashing up your own funds and accepting help when necessary.
And while it can be tremendously worthwhile to enlist the help of an investor, you never want to give away too much of your business too early, either.
On a related note, fatigue is another major challenge that small business owners face.
Starting and running a small business tends to creep into your personal life.
In addition to taking on other work to finance the business, many business owners will work longer hours than their employees in order to keep things afloat and going in the intended direction.
Fatigue, of course, inhibits your ability to make good business decisions, and it sure doesn’t improve quality of life either, so it’s important to find that balance between working hard and not overworking yourself.
Small client base
When small businesses are still growing, they often depend on a single client or a select few clients for business.
Meanwhile the client is enjoying the convenience of outsourcing to you, and you are essentially working as a subcontractor for their larger business.
This shifts liability over to you, because if the work dries up, the client can simply back out, and you lose a significant chunk of work.
This is why it is important to establish a diversified client base; your income can remain relatively stable even if one client stops coming to you with business.
Of course marketing is a challenge for small businesses, as well.
You essentially have to create a customer base from the ground up.
Fortunately, social media, smartphones, streamlined email marketing services, and other communication channels are making it easy for small businesses to have their voices heard; but the trick is figuring out who your target client base is, which platforms will give you the most success, and how you will organize those platforms to best reach your target client base.
If something were to happen to you, would your business keep going? How do you make that transition from personal pipe dream to full-fledged, multi-person operation?
As small businesses grow, their owners often face the challenge of learning to let go of certain decisions and responsibilities so that others can support the business.
Letting go of responsibility can mean taking a hit in work quality as others learn to fill your former roles, but it is essential if a business is going to grow and stay afloat in the long-term.
Hiring on employees
Great, business seems to be booming, and you’ve developed a need for a few employees.
But who will share your company’s vision with you? Moreover, who will have the personality and skills fit for employment at your company?
At larger companies, personality might not be as strong a factor in the workplace, but in small business, each employee’s personality can have a significant impact on the overall workplace atmosphere.
Plus, the skilled workers that you need might not be willing to take the risk of working with a smaller company.
A small business needs to determine how to organize and report finances while complying with federal regulation.
Small business owners often use special bookkeeping software for this purpose, or they outsource to an accountant or bookkeeping expert.
Bookkeeping can get extremely complicated especially in the realm of taxes.
Small business owners already seem to be at a disadvantage when it comes to current tax policy (something you can read more about in this article), so it’s important to organize your finances as best you can to ensure that you are holding onto as much capital as you can.
On a similar note, a small business needs to ensure that it is keeping up with any federal regulations that relate to the industry as well.
How much do you know about legal compliance in your respective industry? Every small business has to figure out how to navigate all the legalities surrounding the industry if it’s going to stay afloat.
Take a bakery, for example: Have you gotten the commercial equipment necessary to make your baked goods? Are you working in a fully inspected environment?
Are you sure that you’re following all of the required safety measures? Legal compliance might seem like a small nuance in the small business world, but it can end up being the end of your business if you’re not careful.
This article is written by Maurine Anderson.