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7 Challenges of Running a Small Business

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Running a small business is exciting to many people but it can be difficult at times. Although there are some challenges when you start your own small business, many of these challenges are fixable. 

According to the Small Business Administration (SBA):

  • About two-thirds of businesses with employees survive at least two years.
  • About one-half of businesses with employees survive five years.
  • Survival rates are similar across industries

Below are some small business challenges you might face and some solutions to help you:


1. Recruiting top employees.

There are many employees who would like to work for a small business. Either they are new and need to be trained or they’re experienced people who feel they want to leave a big corporation. 

You can spend thousands on recruiting and offer huge referral bonuses, but you will not get top-notch employees if you are considered a bad place to work. Also, ensure you are professional in your recruiting practices as well. You should be concerned about the candidate experience and the current employee experiences for candidates to consider you in their job search. 

Implement good hiring practices by developing a handbook, writing clear and detailed job descriptions, and structuring your interviews. Think about what benefits and perks you want to implement into your business to get and keep the best employees. 


2. Keep your employees engaged.

Your number one priority to getting top people is to be a good employer and keeping your employees happy. When they are happy, your customers will be happy. Your employees will be motivated and engaged. They want to do well for you and themselves. 

It is important to have clear and open communication with them and good leadership skills. You shouldn’t talk about one employee to another or show favoritism. You should develop yourself as a leader and ensure you hire great leaders to work for you as you grow. If you hire one bad manager, you have a problem. You will have turnover and then you will have hiring issues and customer issues. 

If you’ve never managed before, consider taking classes or some training. 

Research best practices on employee engagement. They are the ones that have your back and will do great for your company if they are motivated. 


3. Staying competitive with larger companies.

You may think you can’t offer the services or products that a larger company can, but you can offer more. Many times, when someone calls a large business, they have to go through many options before they can talk to a customer service representative. The service may not be personalized, and customer services issues may not get resolved.  

As a small business, you probably know many of your customer’s names. You know things about them which makes them happy. Large businesses may not have this customer relationship. 

Realize the opportunities you can give your customers. Make a list and ensure you train your employees to offer that exceptional service. Many people want good customer service. Think about what you can do as a small business to exceed each customer’s expectations. Go above and beyond what is required. What could you do extra for that customer that makes you valuable to them? 

Once you exceed their expectations, they will recommend you to everyone they know. 


4. Using the right tools and systems. 

Implement software and systems in your business which will make it easier for your employees and customers. For example, ensure you have good computers and copiers. No one wants to work for a business where everything is falling apart. Invest in good technology to make it easy. 

Look for productivity tools which may help you manage your time effectively. For example, if you are managing your company’s social media instead of delegating it, find software that can help you schedule it at least a week in advance. Invest in a customer scheduling system which keeps customer information and schedules appointments and tasks for your employees. 

Consider investing in ezClocker for employee time tracking. It will help you manage your employee’s timesheets instead of manually tracking their time. It will save you money and time by allowing you to view your employees’ timesheets in real time. Employees can use their own mobile device as a time card, and it has GPS support where employee’s GPS location is captured when they clock in/out so you can verify their location.

If you will be hiring many employees, consider investing in a Human Resource Information System (HRIS). Many will track applications, send offer letters, help with performance management, payroll, benefits and do many HR functions automatically. This is a great way to save time for your small business. 

Think about what areas cost you a lot of time. Could you purchase software to help?  



Need an Affordable Time Clock App for Your Employees?   Try out ezClocker for FREE!



5. Avoid burnout and staying focused

One of the biggest challenges when starting your own business is to find time for yourself and your family. You are eager to do everything, but you also need your time to avoid burnout

If you are starting to get tired of your business, think about new ideas and opportunities. Push yourself to keep going and find improvements. Ask others for help so you can take some time to get away from the office for a little bit. What motivates you to perform better? Are you using your creativity to find better solutions and help for your small business? 

One of the small business challenges that owners face often is being afraid to let others take over. Is there someone else that can do the tasks which you are tired of doing? Delegate to others who want to learn. Once you train them and turn it over, don’t micromanage. Trust that they will do a good job. Will they make a mistake? Probably. But that is how they will learn. 


6. Balance your growing company with great quality.

If you are doing well, your company is probably growing fast. Don’t forget about your quality. Ensure you are still offering great customer service and top-notch quality for your customers. This can be difficult if you are getting a lot of business in a short period of time. 

Are you taking short-cuts to get everything done? If so, stop. Think about what you need to do so you can still manage the level of service you have always offered. Do you need more workers? Spend some time thinking about what you need to offer great service and quality. 


7. Market your business to the right people.

If business is slumping, look at your original marketing plan. Is it time to modify it or are you still following your plan? Be creative and you may want to consider investing in something different like an email campaign. You may need to increase your social media presence. 

[Learn The 7 Marketing Mistakes You Need to Avoid]

Consider giving deep discounts if someone refers a customer. On your social media campaigns, think about offering promotions and discounts. Think out-of-the-box and consider changing what is not working. For example, many elderly people need help and discounted services. They like to find businesses who won’t take advantage of them and offer good customer service. Think about marketing to different groups which need assistance. If you do well, they will tell their friends which can give you more business. 

Having a business can be tough, but it can also be rewarding. Face your small business challenges and invest in your business the right ways. If something isn’t working, change it. Hire great people and let go of the ones quickly who don’t love what they do. Be passionate about your business. When you are passionate, your employees will feel that way as well. 

Challenges will come and go. Accept those challenges and develop plans to make your small business thrive and be a top employer in your community. 

Don’t be afraid to be different. You don’t have to do the same thing other businesses do. Think about how you can stand out and be better. 



Author: Kimberley Kay Travis

Kim Travis, co-owner of Travis and Adams Consulting Group, has over 20 years’ experience in human resources and leadership roles. She has specialized knowledge in employment law, employee relations, recruiting, management consulting, leadership development, manufacturing safety programs, and writing business articles and blogs.

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