Updated on January 29, 2019
10 Challenges Small Business Owners Face
The Biggest Challenges Faced by Small Business Owners
When it comes to starting up any small business or if you’re just at your first couple years of your business, we’ve indicated the most common problems that all small businesses have faced at some point.
When it comes to health care, it is bar-none one of the most difficult parts of operating any type of small business, and it all has to do with properly managing a health care plan for your current employees. Without question, we know that the health of your workers is indeed very important. However, as group health care insurance premiums continue to rise, managing the finances for employee health benefits can be quite difficult to swing especially if you are a smaller business with only a few employees.
As the years go, business owners have started to feel their collars being tightened by the government. One extremely huge regulation now deals with the environment in which workers operate. This just simply means that acts such as the Clean Air Act of 1990 now forces financially struggling owners to completely remove air pollutants. These have also gone on to include even common chemicals and gas which contribute to the depletion of the ozone layer along with vehicles that add the levels of smog.
Don’t get us wrong, this act is in no way bad, but it does indeed provide challenges for owners who are in financial situations and others such as not fully knowing how to deal with protecting the environment or simply even proper vehicles. In addition, advertising regulations can also hinder any business. This is simply due to copywriters enjoying their work as they become extremely creative, this goes on to add a huge number of claims which have been known to be fraudulent. As such, the Federal Trade Commission has applied regulations which state that both printed and online advertising should be 100% true to their word and customers should be fully provided with the claims of the adds.
Federal Income Tax
For most businesses, every year their initial income tax rates sore as high as they can. According to the current law, the rate of tax for corporate is that of 15% for the first $50000 of income. However, they are expected to deal with a rate of 25% on their next $25000, and get this, a huge 35% on anything over $10 million. So, be sure to educate yourself on your states current rate!
Due to the continued fluctuation of the economy, no one and we mean no one can predict the economy’s outcome. However, business owners in the U.S. can utilize SBA 504 loans to aid them with purchasing both equipment and commercial property alike. And, this particular loan protects its borrowers from the continued rate of increase as a result of the economy and it also facilitates a lower finance cost. This in turn goes on to let users get the most from the applied rates of tax and it also prevents them from taking risks that lead them into trouble.
If your business is relatively small and you operate from your home, this saves your vital deductions for home office and it maximises your profit gain. However, if your book keeping skills aren’t so strong, you can indeed have a very hard time dealing with your records. In addition, cash accounting is available in the event where your business has made less than $5 million and this method is a bit more advanced than traditional methods.
When a business owner has invested into his business, Section 179 of the National Federation of Independent Businesses state that the cost is instantly deducted. As a result, your investment can now be reinvested once more to build and successfully grow your business.
Cash flow management is extremely important whether it be a simple budgeting system or an online invoice, this task can be quite challenging and even daunting. And just about every owner of a relatively small business has had quite a few problems when it came to cash flow. Be sure to track the where about of your funds, know where it is being spent and your sources of income.
As you grind daily, your passion needs to be what you’re doing, and you need to become fully obsessed with it. Because when you don’t your services and products suffer a huge deal, and your customers receive the poor end of this stick. We all know what happens after, your customer now becomes someone else’s customer. So, if you truly want to become successful or just simply more successful, you need to keep at it and become obsessed so that you give your all to your customers and your business.
Not Diversifying Client Bases
When you look at your client list, if you see those who support more than half of your income, you need to start racking in more clients. And you also need to create better deals for your long-time supporters. Because your prized pot of gold can be whisked of easily into another direction. So, when you’re still small in the game, you need to be innovative and make your clients want to stay as you bring in more because you will be in the worse position if the leave you with smaller clients who bring you very little money.
Growth vs. Quality
As time goes, any business beings to boom and grow rapidly. As such, small business owners need to think ahead as they continue to increase their services and products along with their customers. Those who haven’t planned are surely going to suffer huge losses as the demands increase. So be sure to scale without compromising the initial quality that you first started off with.
Hiring New Employees
All around the globe, hiring employees has become quite the task. This is mainly due to all the added cost that we previously stated. And, these numbers keep increasing with time, as such, all of these obstacles arise before suitable salaries can be set. However, employees are viable to any small business and they can help make the operations go smoother, so be sure to always make wise judgements when it comes to measuring your profits against your expenses.
Keeping a Calm Head
For any small business, it is important to realize that a calm head should always be maintained because at some point we all have to face these challenges. No matter what industry we are in, we still deal with all of it. So, your response in the face of a hurdle will change the outcome for your business.
Remember, obstacles can always be overcome with a calm mind.