Starting a new business can be fraught with problems, but if you can do the basics well, you are more likely to succeed in running your small business. By preparing for the most common problems, you will have more resources available to tackle the unique issues in your business. Let’s take a look at the four most common problems for SMEs.
Keep the cash flowing
This is probably the first place where most businesses get stuck. They often run into cash flow problems. Either they have outstanding invoices from customers, spend all their profits, or struggle to keep up to date with their suppliers. As cash flow is the lifeblood of your business you need to manage it well. If a customer has not paid their past invoices, stop working with them until your invoice is paid. If the order is large, then ask for a deposit before you start.
Making a profit is great but you need to put some of it back into your business. This can be towards a rainy day fund as well as a fund to buy better equipment in the future should the need arise. Finally, try to get the largest payment window with your suppliers which you are both comfortable with as this will give you some wiggle room with your cash flow.
Find good talent
The people you employ are a representation of your brand. The way they treat your customers, fellow employees, and suppliers reflects on what you as a boss are like and what the brand is like. It is important to hire the best quality talent that you can afford. To attract good talent to your business, you should offer perks that your talent would want. It might not only be the salary but the freedom of how and when to work could attract them.
You should also have the basic benefits available, like health insurance and a market-related salary. Finally, who doesn’t like a little bit of appreciation? Show your employees appreciation by having a lunch together or having an employee of the month. This will encourage loyalty and productivity amongst your staff.
Have scalable processes
Many entrepreneurs start businesses so that they can become like the giants in their industry. Some may have hit the sweet spot but grow too fast and fail because of a lack of funds or processes that break at a certain point. Processes should be implemented from the start. Many programmes start with a free example for small businesses (1-5 employees) and then can be upgraded as your business needs more functionality from the programme.
Therefore when buying programmes try to see how the software can grow with your business. Secondly, review your processes annually and adapt those that have become obsolete. Lastly, by building processes for your business, you will be able to onboard staff more easily when the time comes for you to grow your company.
Burnout
You started your business and it is going well. A bit too well, as your workload far exceeds what is humanly possible to do in one workday. But you continue because if you don’t, your business will fail. However, it is inevitable if you continue on this trajectory that you will start to fail and may lose your business and personal life if you don’t make a change.
It is important to recognise when you need help and ask for it. Hire someone to help you with the parts of the business that are your weak points and you focus on your strengths. This will not only breathe new life into your business but you will enjoy it too.
By solving these four problems, you will be well on the way to becoming the next titan in the industry that you have always admired.
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