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 and these include things like hiring the right people, building a brand and so on. However, there are some that are unique to small businesses, ones most large companies have grown out of long ago. Here are a few thoughts:
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.
Finding it and managing the cash flow. Cash is hard to get and there is never enough. If you are a fast-growing company you can rapidly outgrow your available resources, if you are an under performing company you can’t get enough cash. Many companies do not manage cash well.
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. Lack of a Clear Plan
Many businesses don’t know how to plan. Lack of a plan worsens the cash problem by wasting cash chasing tempting diversions, and throwing money at problems. Equally important is updating your plan according to changing economic and business conditions and to ensure your survival in weaker economies.
5. Ineffective Leadership
This issue takes many forms. It is frequently in the form of depth of leadership. The founder of the company is too much 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 behind him or her either through recruitment or by outsourcing. This eventually causes the company to stop growing and eventually could lead to failure. Directors should always remember their core role and responsibilities.
I trust these ideas provide thoughts to resolving some issues faced daily by many businesses as they strive to develop and grow.
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