There are plenty of small business problems which can cause difficulties for the business owner but with the time to think and focus, solutions can usually be found.
The symptoms of small business problems are clear - no cash in the bank (or even worse a large overdraft), low profitability or losing money, few customer orders or enquiries, difficult staff, broken promises and commitments.
Small Business Problems & The Pathways To Profitability
In my free report, The Profit Tipping Point, I look at the five pathways to profit:
- Attractiveness of the market
. - Rivalry of competitors
. - The extent of competitive advantage
. - The management skills of the senior management team
. - The inner game of the leaders including vision, goals, clear priorities and time management.
Each of these has the possibility to be the cause of small business problems.
I've written another blog article about an alernative way to diagnose business problems which is well worth reading.
The Source Of Small Business Problems - External Or Internal?
Please notice that the first two are external to the business and while you have have some small influence on what's happening - for example by your decisions to niche - the basic situation is that the business needs to "adapt or die".
It sounds harsh but it emphasises why topics like industry analysis are so important. It's much better to change on your timescale because you've seen the problems on the horizon than to be forced into a knee-jerk reaction.
The third item, competitive advantage is a direct function of how you compare to your competitors and is therefore internal and external. While you can't control what your competitors do to innovate, you can make sure that you focus on delivering products and services that match the wants and needs of your target audience.
The fourth and fifth - management skills and the inner game - are internal. These are completely under your control and high effectiveness in these areas can compensate for weaknesses in the first two pathways to profit.
Other Small Business Problems
Some problems come from customers, suppliers and employees but these can usually be solved through effective management skills and in the case of customers through having a clear differentiation strategy.
The Problem Of Red Tape
I don't believe that any government gets how de-motivating red tape and bureaucracy is to a small business owner. There is a huge difference in culture between the entrepreneurs approach of "just do it" and the form filling, health & safety assessment, application for apporval world of local and national government.
Unfortunately you've got to get on with it or at least outsource the onerous issues of complying with red tape. The problems will only get worse if you ignore it.
Family & Health Problems Knock On Effect On Small Businesses
Because small businesses are small with few resources, they depend bvery much on the business owner to be a) the driving force behind the business and b) to do much of the important work.
I've written before about the problems of business owners and illness based on my own experiences. It also applies to illnesses within the immediate family of the business owner. Some things are much more important than work.
Other family issues and problems also have a knock on effect on a small business. One insolvency practitioner I spoke to believed that marriage difficulties, divorce or affairs were at the centre or many severe business problems. Why? Because the business owner was distracted and the business had fallen well down on his or her priorities.
Solutions To Small Business Problems
First get your strategy right - you have a choice of making your business life easier or more difficultand I recommend doing the big thinking and planning to make it easier. Do get yourself a copy of my Profit Tipping Point report to read.
Yes it takes time when you're busy, busy, busy but you save time and make more money in the long run.
Second, get your inner game in place. The vision comes from your strategy work but you need to follow through with cascaded goals and strong time management control.
Third, improve your management skills and those of your team. You don't have to be great at everything but try to get the important work by someone who is very good. This may mean outsourcing.
Fourth, look at where the business is vulnerable and put in contingency plans. Systemising your business with the emphasis on youyr core processes is important. So too is cross-training your staff to cover for absences. Start by putting together a skills matrix of who can do what essential tasks.
Some Small Business Problems Are Predictable
As people our lives change from being babies, infants, teenagers, young adults, parents, empty-nesters and retired. The common issues and problems are very predictable.
It's the same with small businesses which go through a similar growth life cycle.
I've written about this in Small Business Growth Problems - I recommend you read it.
What Problems Affect You Most As A Small Business Owner?
Can you recognise the problems you face in the topics I've covered or do you have other problems?
Which Of My Free Business Reports Will Help You The Most?
Take a look at the free pdf reports I'm giving away and decide which will help you the most right now. There is a wide choice on many important business stocks so click on free business reports.
Well said, very informative. These solutions will provide success for the small business owners. Thank you for sharing this.
Posted by: Melissa | 30 August 2011 at 10:43 AM