Many employees and professionals now prefer to leave their formal employment and startup their own enterprises, mostly at home. Such a move is highly rewarding in many ways: an individual could have more time for personal and family affairs, there would be no requirement to report to a superior, and income flow opportunities abound.
However, small business owners know that putting up the funds and operating a small venture is not a piece of cake. It could be challenging and stressful at times. Small businesses could be enviable due to agility and fluidness especially when it comes to business practices and procedures. But because of their scale, small business owners must address specific issues for survival and prosperity. Here are five of the most common among those challenges.
1. Bigger competitors
The biggest issue that hounds small business owners logically is the challenge posed by bigger competitors. Larger businesses definitely have bigger budgets that enable those to come up and provide services and products at lower costs. It is always a challenge for a small business to match prices set by bigger rivals because doing so might compromise its own pricing scheme. In addition, small business owners also must be more strategic in providing more benefits and value proposition.
2. Difficulty in attracting customers
Needless to say, small business would always have a harder time attracting customers or clients compared to their bigger rivals. This is because small business owners have limited advertising and marketing budgets. It is also a fact that many potential customers would initially be reluctant to get into transactions with small businesses because of their common notion that such ventures would not last long and would not be able to bring about appropriate level of standards and service.
3. Difficulty in hiring employees
Small business owners also usually rant about how they find it hard to hire qualified employees. That is because they still need to compete with bigger companies in this regard. Of course, it is hard to match the benefits and salaries offered and provided by the giants. Most potential and qualified employees would also doubt the career advancement opportunities that small businesses could possibly bring about.
4. Growth issues
The small scale makes it difficult for small businesses to grow. As mentioned, small business owners almost always have limited budgets for marketing as well as expansion. Limited human resources is another factor that hinders growth. It is a tough challenge for small business owners to find more creative ways and use limited resources at the same time for growth. That is because they must also manage daily operations.
5. Financing issues
Small business owners face challenges when finding and obtaining cash for working capital and expansion. Many banks prefer lending to bigger companies. It is also impossible for a small business to sell shares of stock publicly due to constraints in market policies and scale. Fortunately, there are now several non-traditional lenders and government institutions that cater to small business financing.
About the author: Andrew is a small business writer and contributor. When he is not writing, Andrew advises business owners on the best business loans at Australian Lending Centre