There might be some issues that you as a small business owner might have to face during the whole business life cycle whether you have a product-based business or a service-based business. Therefore, it is better to be prepared in order to overcome them so that business growth is not hampered.
If you are striving to learn how to sustain a business and have a successful one, it will take some thinking and effort to achieve that.
Once you get to know about the issues you might face, you can plan accordingly.
Here are some common issues a small business might face:
1. Company registration
Registering the company can also be a long and tiring and costly affair for a small business owner.
Funds or finance is a huge problem in small businesses.No business can function without adequate finance/funds. The main reason for this issue is less availability of credit/loans not getting approved because of weak finances, you might have bad or low creditworthiness. You might have to, therefore, borrow funds at a high-interest rate which will affect the finances and your credit rating as well. Banks also do not have flexible terms which makes it more difficult.
Keeping a track of the accounts is also difficult for a small business owner because of no knowledge.
3. Raw materials
Raw materials are a necessity for business, and no proper quantity, poor quality, and no timely supply of raw materials can cause problems and will affect the functioning of the business/manufacturing unit.
4. Office space
Setting up the office space is crucial and getting a good place is difficult.
Small businesses are not able to adapt to the latest technologies,i.e. there are no proper resources available to update the machinery and equipment. This might affect the production or manufacturing process with the products being made in low quality at a higher cost because of which they are not able to compete with the competitors in the market.
It is sometimes difficult to get information on competitors, consumer preferences, and current trends. This makes it difficult for small businesses to upgrade their products keeping in mind the market requirements.
Small businesses also sometimes do not prepare a marketing plan and do not use creative ways to advertise the products which just fails to catch the attention of potential customers.
If there is no proper business infrastructure this will also be a problem as it may affect the functioning of the business and the production capacity and processes.
Inflation can cause the interest rates of the loan to go up and might also make it difficult to get a loan.
9. No proper utilization of capacity
Small businesses fail to utilize the machinery and equipment until the required capacity thus lagging in faster business growth.
10. No project planning
Another issue is poor project planning. Sometimes business owners just start with the business without any plans without studying the market, the demand, availability of proper space and infrastructure.
Preparing a proper business plan should be the first step is that you are aware of the dos and dont’s for your project and the workflow to achieve a target.
11. No skilled manpower
Inexperienced or new workers is also an issue and is a risk to the business and experienced ones may ask for a huge salary and other facilities. These problems will result in lower productivity, can spoil the quality and have an effect on profitability.
12. Not distributing the tasks
One person doing the whole job can be stressful. Make it a point to assign different tasks to different people so that the tasks are done efficiently and your employees work as a team.
13. Staying Organized
Staying organized is a challenge. It might be difficult at the start to do that so it is important to work towards it. Take help from an expert, if needed so that your business is on track.
14. Staying competitive
Continuing to fulfill the needs and wants of the customers is another issue. And to be better than your competition is another. If you are not able to do this your business might not move ahead.
Customer satisfaction and retention play a very important role too as it decides the fate of your business.
15. Staying up to date with the trends
Some business owners are not aware of market trends. Keeping oneself well versed with the trends on the market is important for a small business owner.
16. Filing GST
Small businesses face trouble with understanding the GST rules and regulations.
Businesses can overcome this by using the helpline provided by the government.
17. GST procedures are online
All of the GST procedures are online which is difficult for a small business owner due to the lack of technical resources like internet connection.
18. Working capital
The working capital blockage is another issue since the funds are maintained in the form of an electronic credit ledger with the tax department. This also has records of all the tax liabilities.
Steps to overcome these problems:
1. Keeping a tab on the expenses
To keep the daily business expenses under control, by shifting to a place that’s cheaper, reduce the number of telephonic connections, use the unused office space by giving it to the bank on rent to install an ATM machine, never buy in bulk, avoid using traditional ways of marketing,keeping a tab on the stock,selling products online, keeping track of the loan status,hiring the right people, and planning the taxes.
2. Planning the stock in advance
Planning the stock in advance is the right strategy so that you do not end up giving more maintenance costs which can harm the cash flow.
3. Make use of technology
Use Point of Sale system (POS) so that you can analyze sales data, maintain sales history, improve pricing by integrating barcode scanners and credit card authorization.
Use accounting software like Zipbooks to help you calculate tax payable, to keep a track on the debit amount to be paid, credit to be received, inventory management, invoices, etc.
By using mobile wallets you can add or spend money or purchase goods.
4. Use social media for marketing/advertising
Use social media like Facebook (Facebook pages, ads), Linkedin, Twitter, Youtube (Videos about your products/services) to advertise your products.
5. Create a business plan
A business plan is one of the most important documents for a small business. It should have information about the team (work experience, skills, education background), the objective of the business, the business summary( services, products, awards), some existing problems and solutions for them, market share of the business, competitors of the business, and some information on future financial projections (profit,sales).
6. Work with limited staff
It is not necessary to hire more people, a small business owner can grow his/her business with the existing staff as well by supporting and guiding the employees, cross-train them in various business processes, train your team to speak effectively and communicate issues if any, implement some hardware and software, outsource people if required, stay focused on the goals, encourage teamwork, distribute the duties correctly, do not be disrespectful and do not tolerate such behavior as well.
7. Staying ahead of the competition
One can learn from the competitors some aspects of financing like the investment options chosen why they were successful and if not why what was the reason, methods used by competitors for cash flow management, adopting the methods or techniques as used by the competitors to measure the performance of the business,taking a decision on manufacturing,outsourcing, or buying products based on that of the competitors, adopting tax saving practices like that of the competitors, use methods used by competitors to record the finances and the accounting processes, looking at the competitors mode of taking a loan,bank or an NBFC and then deciding for the same for your business if required.
8. Working capital loan/Financing
The working capital loan is taken so that the everyday operations of the business are not affected. These loans require no collateral, loan terms are flexible, there are no restrictions in using the loan amount. This loan is effective when there are seasonal fluctuations,it can be taken for the everyday expenses, if the business does not have enough cash reserves, if there are no adequate funds, etc.
If you want a working capital loan or loan to expand your business, contact Gromor Finance for unsecured loans at attractive interest rates and quick loan disbursal!