Business Problems

Problems facing small business

 

External problems

External problems are countless, including the state of the economy, the high cost of insurance, taxes, red tape, health & safety, lack of bank lending, competition within Canada and from abroad, and the list just goes on. Many of these issues are beyond control of the individual business so we will focus on internal problems.

Internal Problems

Cash

Finding it and managing it. There is never enough. Fast growing companies can outgrow available resources. Underperformers can’t acquire cash.

Leasing vs purchasing can lesson stress while commercial loans, credit cards and overdrafts are expensive. Care is needed to protect the business’ overall credit rating.

Lack of a Clear Plan

Many businesses don’t know how to plan. Lack of a plan aggravates the cash problem by wasting cash chasing tempting diversions; it is wasteful to throw money at problems hoping for a quick fix. Equally important is revising your plan according to changing economic and business conditions and to ensure your survival in a recession.

Ineffective Leadership

This issue takes many forms. It is frequently in the form of depth of leadership. The owner of the company is too hands-on and a) does not concentrate enough on his primary role as a leader rather than a manager; and b) fails to enlist support of competent managers and staff or through recruitment and outsourcing. This may cause the company to stop growing and eventually could lead to failure.

Sales/Marketing Competence

This leads back to planning and leadership. Many businesses have not defined what their USP is. Don’t try to compete in conflicting areas, such as lowest price and highest service. One lowers revenue and the other adds to costs. Part of the planning process for a product should include a clear answer to one question, “why should they buy from me?”

Lack of Execution

This may be the largest issue facing small business. This lack can be in a number of forms including:

-        Poor execution of strategy

-        Failure of new product development

-        Owners spend only minimal time on strategy

-        Poor communication of strategy to employees

-        Lack of performance measures and little performance analysis

 

These are some of the problems from my viewpoint. What do you think?