Are you planning to start a small business? According to the U.S. Bureau of Labor Statistics (BLS), one in five small businesses fail during their first year of operations. Statistics such as this can be disheartening, but there are ways to increase your small business’s chances of success. By understanding the biggest challenges encountered by small businesses, for instance, you can plan ahead.
#1) Insufficient Capital
Insufficient capital is an all-too-common challenge encountered by small businesses. Regardless of what you intend to sell, your small business will need capital. Capital includes cash and credit that you can use to cover business-related expenses. Small businesses often have limited access to traditional forms of financing, including bank loans, which can make it difficult to start or grow their operations.
#2) Time Management
Many small business entrepreneurs struggle with time management. They essentially juggle dozens of different tasks, ranging from sales and marketing to operations and financing. And by performing all of these tasks, they struggle to manage their time accordingly. If you’re going to start a small business, you’ll need to emphasize time management.
We can’t talk about common challenges encountered by small businesses without mentioning accounting. All businesses, regardless of size, must keep records of financial transactions for tax purposes. Unfortunately, many small business entrepreneurs have poor accounting skills. They either assume it’s not necessary, or they wait until it’s time to file their taxes. Accounting software like QuickBooks, however, can help you overcome this challenge. With QuickBooks, you can easily record and track all of your small business’s financial transactions.
#4) Recruiting Employees
Recruiting employees is a common challenge among small businesses. Unless you plan on running a sole proprietorship — a business structure in which you are the only worker — you’ll probably want to recruit employees. But where do you find these employees, and how do you determine whether they are a good fit for your small business? Recruiting employees can be challenging for reasons such as these.
#5) Acquiring Customers
In addition to recruiting employees, you’ll need to acquire customers. All businesses have customers. Business-to-consumer (B2C) businesses sell their products or services to consumers, whereas business-to-business (B2B) businesses sell their offerings to other business owners. Regardless, both types of businesses have customers. When starting a small business, you’ll need to invest in marketing so that you can acquire customers and, thus, sell your business’s products or services.
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