The 4 most common small business problems – and how to beat them

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If you’re opening or expanding your small business you’ll be extremely lucky not to run into problems – they might not be enormous issues, but anything that takes your time and attention at a crucial time can be annoying, costly or time-consuming to put right.

Fortunately, you’re on a well-trodden path – meaning the issues you’re likely to run into have been encountered plenty of times before. We’ll share the 4 most common of those small business problems here – along with some info on how to avoid it in the first place, or get around it if it’s already occurred!

  1. Relying on one client

It might seem fantastic to have one client who keeps your business bank account looking healthy, however, if you come to rely on that company or individual’s custom to keep you afloat – you’re in a very precarious situation.

There are a million things that can go wrong for that company or person; a new manager gets involved, they lose their job, they fall ill, the company closes, the organisation is bought out or even goes bankrupt… the possibilities are endless – and they could all impact your company significantly.

Ask yourself what you’d do without your biggest clients. Could you survive? Would you have to find alternative finance? Would you have to lose staff?

What to do about it?

Don’t wait until there’s a problem! It might seem counterintuitive but you want to put yourself in a position where you can lessen the proportion of your income that comes from this one client. There are two ways to do this:

  1. Look for alternative customers and scale back the amount of work that comes from the big client – thus maintaining your workload.
  2. Look for alternative customers and maintain this amount of work that comes from your big client – thus requiring an upscaling in output.

It’s also sensible to have a ‘disaster plan’ – that might be a financial buffer in the case of losing a big client, or it might just be a marketing plan that’ll put you in front of lots of new customers quickly if a problem arises.

  1. Founder dependence

If you’re the person who’s created your company it’s understandable that you hold a lot of information – but it can be a dangerous situation to be in when your company is growing. Now, what we’re about to say might sound bleak – but what would happen if you were incapacitated for a week, 2 weeks – or gone for good?

Your company needs to keep running, if you have employees and family you owe it to them not to hold mission critical information that will derail the train should your organisation not be able to access it.

What to do about it?

The first step is to think through the scenarios; what would stop the business running if you were out of the picture for a month? Start addressing the gaps that you find. You don’t need to pass information entirely – perhaps you could just show someone else how to access it should you ever be away unexpectedly.

Talk to your partner organisations too, accountants, banks, suppliers – work with them to have a backup plan should it be needed. You can probably be 99% certain that you’ll never need to call these contingency plans into action – but that’s a damaging 1% if you do and the company is left floundering.

And don’t forget, having all the info often means you can’t take a holiday either – which brings us onto our next point…

  1. Maintaining your drive and motivation

You’ve put your company together through thousands of hours of hard work, late nights and personal spending – and it takes its toll. The best entrepreneurs in the world have looked at their project and thought about ditching it all because of tiredness and fatigue.

If you want to maintain your ability to give 100% to your business you need to make sure you spend some time on making sure you’re okay. If you don’t, expect fatigue related illness, stress, mood swings and more…

What to do about it?

You should start trying to look at yourself as objectively as possible. What’s your mood like when you first wake up in the morning? Are you able to relax when you’re not at work? Can you take your mind off business and not worry?

Ultimately, no one can give anything 100% without some rest and recuperation. Try to safeguard time spent doing something you love, even if it’s just once a week. If you’ve got a family, spend some quality time with them and switch off your emails. It’s unlikely that a disaster is going to strike if you don’t answer your phone for a few hours – and if it is, you might want to read point 2 again…

  1. Keeping a healthy cashflow

As a small company, there’s a chance you’re the person in charge of your finances – okay, you might have an accountant keeping tabs on the bigger picture, but until you’ve got accountants assistants and admin staff you’re likely to be the person handling the day to day finances of the business.

This can be a problem, while the money in the bank is important it can be tough handling the administration that surrounds it. Without that, you’re going to struggle to maintain a consistent cashflow, which can lead to big ups and downs – not ideal when bills need paying…

What to do about it?

If you’re too busy to pay close attention to the daily finances this should be one of the first jobs to delegate. That doesn’t mean becoming removed from the finances, quite the opposite – if required you should be in formal communication with whoever is handling the money admin on a daily basis.

Invoicing should be done at least once a week – if possible, communicate with your suppliers and get a handle on their invoicing process – what are the payment terms you’re on? Could they be negotiated down?

Can you find software that automates or semi-automates your invoicing procedures? Could you look at outsourcing your payroll? Anything you can do that means your money is being handled appropriately and as frequently as possible is going to be good for cashflow…

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