Starting a business is a big achievement for many entrepreneurs, but maintaining one is the larger challenge. There are many standard challenges every business faces whether they are large or small. These include things like hiring the right people, building a brand and so on. However, there are some that are unique to small businesses. Here are a few challenges that may be faced:
1. Client Dependence
If a single client makes up more than half of your income, you are more of an independent contractor than a business owner. Diversifying your client base is vital to growing a business.
2. Cash Management
Having enough cash to cover the bills is a must for any business. To avoid shortage small businesses owners must either be heavily capitalized or be able to pick up extra income to shore up cash reserves when needed. This is why many small businesses start out with the founders working a job and building a business simultaneously. While this split focus can make it difficult to grow a business, running out of cash makes growing a business impossible.
The hours, the work and the constant pressure to perform wears on even the most passionate individuals. Many business owners, even successful ones, get stuck working much longer hours than their employees. Moreover, they fear their business will stall in their absence, so they avoid taking any time away from work to recharge. Fatigue can lead to rash decisions about the business, including the desire to abandon it completely. Finding a pace that keeps the business humming without grinding down the owner is a challenge that comes early (and often) in the evolution of a small business.
4. Owner Dependence
If you get hit by a car, is your business still producing income the next day? A business that can't operate without its founder is a business with a deadline. Many businesses suffer from founder dependence, and this dependence is often caused by the founder being unable to let go of certain decisions and responsibilities as the business grows. To meet this challenge a business owner merely has to trust that he can give over more control to their employees or partners.
These are some of the challenges a new business faces and the challenges should be considered before leaping into a start-up. A competitive drive is often the catalyst to start a new business but time invested in a well thought out plan will be rewarded.
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