In last week’s post, Business Focus: The Secret To Business Success, I shared a statistic that really shocked me. That only 5% of businesses in the UK have more than 10 employees. (The figure is actually less in the US, Canada and Australia). This got me wondering about why this is and what are the most common problems business owners experience when it comes to scaling their small business?
If you ask any small business owner what the hardest aspects of running their business are, you’ll likely get a wide variety of answers. But just about every business owner has, at one time or another, experienced most, if not all, of the common business problems and challenges listed below.
1. Managing The Transition From Entrepreneur To Business Owner
There’s a world of difference between starting a business from scratch and growing an existing operation. Not only do small-business owners have to switch gears as they take on sales, marketing, branding, financial management not to mention other duties. But they also have to out in place the right structures and infrastructure to scale their business.
2. Focusing On The Big Picture
With so much to do when running a business, it’s easy to get lost in a quagmire of small details and lose sight of the real goals of your company. The ability to develop a vision and a simple yet effective business strategy is essential for the long-term success of your business, even when pressing daily tasks cause you to take your eye off the ball. This is often referred to as helicopter vision: the ability to move from ‘blue sky thinking’ down to project implementation and then back up to ‘blue sky thinking.’
3. Financial Management
Many business owners don’t have a steady income. They’re on what I call the cash flow roller coaster with its ups and downs in revenue. A top priority is to be skilled in sustaining cash flow – which derives from your business planning skills. Without a strong business plan, you won’t necessarily know where the next pound is coming from. Knowing how to read the 3 key financial reports, how to prepare a sales forecast and how to price your products and services correctly are all an important part of financial management. As are the management of slow paying customers and bad debts. Knowing when to spend money on expansion or new equipment upgrades also requires sound financial judgement.
4. Manging Risk
Starting any business venture involves risk. According to the Wall Street Journal, a quarter of businesses shut down permanently in the wake of an unforeseen disaster. Yet surprising few business owners have considered the risks to which their business are exposed and prepared a contingency plan. I can’t say I enjoyed updating our risk register for my quarterly reports as CEO to the Board. But I disliked far more dealing with situations that, with a little foresight and planning, could have been avoided in the first place.
5. Making Tough Decisions
From the time you start your business to the moment you sell it or move on, the decisions you make may involve thousands of pounds and affect the lives of other people. Some decisions will turn out badly; others will move your business to the next level. It’s really important that you learn how to make good decisions. And that you don’t dodge making difficult decisions because they are personally uncomfortable. Some decisions – like making employees redundant – never get easier. But they can be managed thoughtfully.
6. Learning How To Delegate
Not having time for strategic thinking is directly related to the inability of many business owners to delegate the activities they don’t have time to do themselves. In the start-up phase, entrepreneurs tend to handle everything on their own. Transitioning out of the “if you want a job done properly, do it yourself” mind-set can be difficult. But it’s important you do – quickly – if you want to scale.
7. Hiring and Leading Employees
Hiring the right staff for your business is part and parcel of feeling comfortable enough to delegate activities that you have neither the time or expertise for. Capable, dedicated workers are what you need, but the time and expense involved in hiring employees can be daunting. Even when you recruit the right people, you have still the challenge of effective leadership and management. As an employer, you must be able to delegate efficiently, motivate your team, resolve conflicts, and stay on top of the projects you and your team are working on.
8. Being Your Own Boss
You’ve planned and longed for the day when you run your own business. And now you’re the boss, with responsibility for handling everything related to the business, the buck stops with you. This means making a total commitment to your business, sometimes at the expense of your personal life,.
9. Staying Motivated
Long hours, including evenings, weekends, and holidays. All of your time, energy, resources, and even your health seems to go into keeping the business afloat. The chances are, there’s no one around to thank you for your hard work. Which is why it’s up to you to keep yourself motivated at all times. This is where having a business coach to keep you on track can be invaluable. Likewise an accountability partner.
Join The Conversation
Questions: Which of these business problems do you most resonate with? What’s the hardest thing about running your business? I’d love your feedback in the comments box below.
Explore These Additional Resources
Did you miss?
- Business Focus: The Secret To Business Success
- 6 Steps To Casting A Compelling Business Vision
- Business Strategy Made Simple
- How Do I Find Good Employees?
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