Every small business experiences a set of common challenges during its inception. It is estimated that more than half of small business close their operations after the first year of operation. The many challenges that face businesses during their fundamental years can be essential to growth or completely destructive. Moving your business from its small stature to a successful firm takes time, commitment and a lot of insight. There are indeed numerous challenges that you will learn about as you operate your business. Some of the most important lessons that you will learn are during the initial faces of the business though. The following are some of the biggest challenges that face small businesses.
Over-reliance on a single client
It is no secret that every business starts with one or two clients before expanding to reach more customers. If your business is relying on a single client for a long time, however, it might be tough to grow. While a single client can be a good source of primary income, you are exposed to a huge risk in you lose that client. Building your base to attract more clients could be a costly feat but it should be done during the early stages of the business.
Management of resources
The second challenge that faces many small businesses is the management of resources –, especially money. There are numerous bills that you will be required to pay from the onset even though your business might not be generating enough income. Other than that, you will be required to continue investing in the capital in order to grow and scale your business. Managing your money ineffectively can result in a cash crisis. In order to be safe, you should focus on having an extra income stream that can caution your business from losses. If you can manage to have a side job in addition to your business, take that route. Ultimately, the manner in which you manage the money flowing into and out of the business is crucial. Professional help is always vital in case you are not sure about your capability.
Constant fatigue
It is no secret that businesses drain a lot of your energy. If you are a first-time investor, this will be a huge challenge. Sole business proprietors, forex traders, and investors all experience this fatigue during the initial stages of the business. You will find yourself being infatuated with the prospects of the business to the extent where you will feel the urge to be present at all times. The best solution will be managing your time properly and creating a pace that is great for you. After all, working when tired will reduce your productivity and thus hinder your business growth.
Founder dependence
Another huge problem that faces small businesses is the dependence on the business founder. There is no doubt that the vision for the business and the mode of operation are firmly in the hands of the founder. This, however, can hinder the growth of the business if the employees do not learn how to handle their tasks quickly. During the early stages of the business, this challenge can be resolved by creating an environment where interaction and constant engagement is fostered. As the owner of the business, you will need to shed some responsibilities to your employees or partners so that the business can benefit from the team effort.
Dealing with quality as the business grows
Another major issue that faces small businesses that are growing is balancing quality and growth. During its foundational phases, a business benefits a lot from the attentiveness that the founders give to the products. Indeed, customers are attracted to this quality and this is what keeps more of them coming. With time though, the demand for products becomes bigger than the supply. Small businesses, therefore, have to grapple with the prospect of lowering the quality of products in order to focus on meeting the demands. This problem can be solved by making a compromise that neither affects product quality nor sacrifices the market.
In summary
Every small business must go through some tough and definitive challenges. It would, therefore, be unwise for a business founder to ignore the prospects of such challenges. The only key to the success of the business is identifying the potential problems beforehand and formulating solutions. The above problems are some of the most common. Knowing them will be vital for the success of your small venture.
