Owning a small business is a dream for many people, but the reality of it can be quite different from what one might expect. Small business owners face a number of challenges that can make it difficult to succeed and thrive. While it can be a trying endeavor, if you remain diligent, stay on top of finances, invest in your relationships, and constantly look for ways to improve, then your chances of success increase greatly. In this post we will cover some of the situations that will require you to rise to the challenge to grow your small business.
First and foremost, small business owners often struggle with financial management. According to a report by the Small Business Administration (SBA), the leading cause of small business failure is inadequate cash flow or lack of access to capital. This can be due to a number of factors, including slow sales, high overhead costs, unexpected expenses, and difficulty obtaining loans or investments. A study by the National Small Business Association (NSBA) found that 27% of small business owners were unable to secure the funding they needed in 2020, due in large part to the economic impacts of the COVID-19 pandemic.
In addition to financial challenges, small business owners must also navigate a complex legal and regulatory landscape. Depending on the industry and location of the business, owners may need to obtain licenses, permits, and certifications, comply with environmental and safety regulations, and adhere to labor laws and tax requirements. These requirements can be time-consuming and costly, and failure to comply can result in fines, legal disputes, and damage to the business’s reputation. According to a survey by the National Federation of Independent Business (NFIB), 34%of small business owners cite regulations as a major problem facing their business.
Another struggle for small business owners is competition from larger businesses and online retailers. Large corporations have greater resources and bargaining power, allowing them to offer lower prices and more extensive marketing campaigns. This can make it difficult for small businesses to attract and retain customers, especially in industries where price is a major factor. In addition, the rise of online shopping has made it easier for consumers to compare prices and products, further increasing competition for small businesses. According to a study by Visa, 74% of small business owners feel that competition from larger businesses is a major challenge facing their business.
Furthermore, small business owners often have to wear many hats and juggle multiple responsibilities. They may need to handle sales, marketing, accounting, customer service, and other tasks on their own, especially in the early stages of the business. This can be overwhelming and lead to burnout, especially if the owner is not experienced in all of these areas. According to a survey by SCORE, a nonprofit organization that provides resources and mentoring for small businesses, 40% of small business owners report feeling overwhelmed by their responsibilities.
Finally, small business owners must also deal with the uncertainty and unpredictability of the market. Economic downturns, changes in consumer behavior, and shifts in industry trends can all have a significant impact on small businesses, and owners must be prepared to adapt and respond quickly. According to a report by the SBA, 20% of small businesses fail in their first year, and only 50% survive past the five-year mark.
Owning a small business is fraught with challenges and struggles that can make success difficult to prosper. From financial management to legal and regulatory compliance, competition, and multi-tasking, small business owners must be prepared to navigate a complex landscape that requires a combination of skill, perseverance, and adaptability.
With so many irons in the fire with just one business, one of the best pieces of advice we can give is, don’t try to do it all yourself! If you are stretched too thin, trying to get everything done yourself, one life saving decision is to hire professionals to handle tasks outside of your specialty. Omnis Bookkeeping and Business Solutions specializes in finding the most efficient ways to fix to your problems, with our system implementation and consulting services. While the rewards of owning a successful small business can be significant, it is important for prospective owners to be aware of the challenges they may face and to seek out resources and support to help them succeed. When you come face to face with one of the many difficulties of running a small business, Omnis is here to help you not only fix the problem, but overcome the challenge as a stronger and more experienced entity.
