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How to Overcome 5 of the Biggest Challenges of Managing a Small Business

Small business owners and managers continually face a variety of challenges and obstacles that can seem to pose an insurmountable obstacle in growing or managing their businesses efficiently and effectively. Without a clear direction on how to approach these challenges many business owners become increasingly frustrated as the challenges seem to snowball while profits continue to shrink. Below is a list of 5 common challenges faced by business owners as well as some proactive tactics for overcoming each of them.

5 Small Business Challenges

1. Challenge: Financial Pressure

Budget and cash flow are two primary areas that affect a company, especially if seasonal ebbs and flows affect your product or service. In addition the economic pullback has significantly affected many companies balance sheets and bank accounts.

Solution: Budgeting and Proactive Management

Though sales do not always meet or exceed expectations, small business owners will want to project both sales and expenses realistically to predict performance. Annual budgeting with quarterly adjustments and weekly monitoring are a proactive approach that successful owners utilize regularly. Some expenses to consider are appropriate salaries for staff and production; costs for health care and other benefits; necessary purchases of materials, equipment and new technology; and identifying the necessary inventory for goods and supplies. It is critical to develop a backup plan if short-term cash infusions become necessary. Identify your funding sources in advance to ensure you have a proactive solution to overcome short term cash crunches.

2. Challenge: Sales and Marketing

Sales fluctuate, are inconsistent, or worse – are declining. Marketing is ineffective, inconsistent, or often nonexistent. Many business owners “shoot from the hip” when it comes to sales and marketing.

Solution: Take Overall Responsibility for Marketing

Most small business owners are often consumed by the day to day operations of their business and neglect daily sales and marketing duties. Regardless of daily tasks and responsibilities successful small business owners understand that sales and marketing is the life blood of the business and place it first on the daily “To Do” list. If you aren’t able to delegate some of the daily tasks to other team members you must schedule your days and or weeks to allow for the necessary sales and marketing tasks that will guarantee the long term success of your business. Reserve time each day to devote strictly to sales and marketing tactics – most successful small business owners spend a minimum of at least 2 hours per day meeting with clients and making sales contacts. In addition setting up a formal time management system allowing for focused selling days; preceded and followed by days with time scheduled to catch up on other tasks proves to be extremely effective.

3. Challenge: Competent Staff to Fit Your Budget

Most small businesses must maintain a low overhead to survive and sustain the business for the long term. How do small business owners complete all the crucial tasks required of their business without going over budget?

Solution: Hire and Train the Best

Finding and retaining key employees and or sub-contractors is crucial for long term success. In today’s dynamic environment employees must multi-task, which may reduce the number of workers in your organization. The challenge is attracting and retaining top talent while competing with the more distinguished benefits and compensation plans that larger businesses may offer. Business owners need to make it a priority to train new and existing employees and help them see the opportunities available to grow with the company from a long term perspective. In addition many operational tasks like payroll, daily accounting, and tax reporting can be hired out to competent subcontractors at a fraction of the cost to self perform.

4. Challenge: Maintaining Client Relations

Due to the growing dependence on email, texting and other technology, the impersonal aspects of client interaction has diminished loyalty and appreciation. In addition competition has reached an all time high as more businesses enter the market and attempt to distract and lure your clients away.

Solution: Take a Personal Interest and Maximize Value

Small business owners must develop personal relationships with their clients. Most importantly, they must communicate that they care and consistently exceed expectations to differentiate themselves from the competition. “Under promise and over deliver” is one of the most effective techniques still in use today. Furthermore, the relationship must be win – WIN. Small businesses must be able to provide their product at a profit AND more importantly clients must believe they receive MORE in value then they give during the exchange.

5. Challenge: Getting It All Done

Marketing, operations, production, accounting, family and personal time – the small business owner is consistently challenged with escalating responsibilities – and unfortunately the same 24 hours they had prior to the increased demands. Many small business owners started their businesses to take back control of their time and life. The reality – small business management increasingly requires more thought, creativity and often demands more personal time from small business owners.

Solution: Effectively Manage Your Most Precious Asset

An effective time and priority management system must be utilized to ensure the small business owner’s success and personal sanity. Time is the most precious asset of any small business owner and must be treated as such. Create a list of the three most crucial tasks to be completed each day and focus on completing only those items first. In addition use a daily calendar and plan your days and work weeks in advance. Schedule personal and family time, as well as your daily work responsibilities. In order to maintain a healthy balance time must be allotted for all areas of life.