January 17, 2020 Last updated January 17th, 2020 88 Reads share

Challenges Haunting Small Businesses

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Problems besetting large businesses are readily discussed by the media. When in 2010, British Petroleum was responsible for a scandalous oil spill, everyone was predicting the company’s end, betting on how many days it had before its complete shutdown. Whenever Toyota recalls a car, people start talking about its lousy management and foresee a downturn in the company’s fortunes. Every step Amazon, Facebook, or Google make is also hotly debated by the media, always eager to envision challenges that the companies’ decisions might bring in their wake.

Yet even though problems faced by large organizations are always in the spotlight, it does not mean that small companies whose struggle is not covered by the media go through life completely carefree. Like business tycoons, small companies are haunted by challenges that tend to reappear every fiscal year. Nor are these problems less pressing than those tackled by large companies. If left unattended, troubles had by small businesses might cause their financial ruin even quicker than they bring more resourceful large companies to the brink of disaster.

In what follows, we are talking about challenges that small companies usually have while growing their businesses, suggesting how to meet them successfully. Among the problems discussed in the paragraphs below are money management, the establishment of brand identity, and the provision of health care for employees. If, as a business owner, you also want to create a retirement account for your employees, you may check our comprehensive list of the best IRA accounts and choose the option that better suits their needs and incomes.

Money Management

It is clear to us that to live comfortably, we need to have enough money to cover our expenses. When we open our own business, the same principle must be at work. To make our business blossom, we should generate enough cash to pay bills. As a business owner, you should be heavily capitalized, or you should be able to have extra income to shore up cash reserves if required. Many people, therefore, start their businesses while still having a daily job, able to focus on their company undividedly only after they have accumulated enough money. Nothing poses a more severe threat to your business than a lack of cash.

Equally important is to manage your money smartly, once your business starts bringing profits. The more you earn, the more professional help you may need, even though you can be well trained in accounting and bookkeeping. It is always a good idea to delegate money management to professional accountants and bookkeepers when your company begins to expand, and the complexity of its books dramatically increases.

Professional Team Members

One is not an army. Whatever smart ideas are knocking around in your head, you will not be able to implement them on your own. To succeed in your business endeavors, you will need to employ a mighty team of reliable, skilled, and smart employees able to contribute to your company’s growth. And the smaller your company is, the more accurate your choice of co-workers should be, because you cannot afford to waste money and time on somebody who does not impact upon your business in a meaningful way. What is especially crucial when making a hiring decision is to employ a specialist who can fill in gaps in your knowledge or who has the expertise wanting in your other employees. It will make little sense to hire somebody who shares your very skillset since such a person will not complement the company. But an employee who brings additional indispensable skills to the table will always make your business stronger. You also need to let go of the so-called founder-dependence. If you want to have a finger in every pie in your company, your business will be bound to collapse once you get ill or simply go on vacation.

Employee’s Health Care

Most of the small business owners focus on a bigger picture, when opening their companies, and thus concentrate more on funds, branding, value propositions, and revenues. They also ensure that their employees are the right people capable of bringing the business forward. Thinking about these people’s health insurance, however, always comes second, even though many business owners would readily confess that sorting out health insurance for their employees is a thorny problem indeed. Finding the right insurance plan is difficult and time-consuming. When chosen incorrectly, an insurance plan can even jeopardize your business.

It is, therefore, crucial for the survival of your business to research available insurance providers and choose an insurance plan smartly. Note also that any insurance application usually requires a large number of documents to be submitted to insurance providers. You will do well if you prepare all the necessary documents in advance. Equally essential when applying for your employees’ health insurance is to analyze the financial situation of your business so that you can determine how much you can spend on their benefits. Decide also how you will pay these benefits to your employees, because you may either factor them into their payroll expenses or deduct them monthly from their salaries.

There are, obviously, other challenges that owners of small businesses meet when managing their companies. They need to establish a strong brand identity, scale their business, balance quality and growth, or simply know how to manage their fatigue productively. You will behave wisely, if you take these and other challenges into account, before embarking on your new business adventure.

 

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Levente

Levente

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