After writing books and articles about small business for the last four decades and owning and running a few dozen, I wondered what other pundits might think were the biggest issues facing small business owners today. I was shocked to find that the experts were far from agreement (not really), but there are some excellent takeaways from this research. Here is a compilation that weights the results based on the findings of Inc., Forbe’s, NFIB, and others.
#1. Government Regulations, Red Tape and Other Nonsense
Since I’m located in California and have been for my entire career, #1 was no surprise. As I’m writing this piece California businesses can no longer ask prospective employees if they have ever been in jail for a felony until after a job offer has been made. You are also restricted from asking about prior salary levels. And the list goes on.
Of course, the regulations we deal with are not restricted to hiring, but also to workplace rules, firing, and compensation. Did you know that if you offer bonuses on piecework, even the bonuses must be paid at overtime rates if the employee works overtime.
#2. The Cost of Medical Insurance
One list found that the cost of medical insurance was #1. While this is probably #1 for companies with over 10 employees, smaller companies are often not offering health insurance. However, the mere fact that they cannot afford health insurance for their employees works against them when it comes to #3.
#3. Finding Qualified Labor
Almost every list had the labor issue in the top three or four. With full employment the problem has gotten worse. However, even in depths of the great recession there was an issue with finding employees who were actually qualified to handle the jobs that were in demand.
#4. Getting New Customers
No one can be complacent. Even if you have enough sales and profits, every business loses customers and sales for a multiplicity of reasons. We could have a separate list of issues under this one, but the big issues today are: Website, other web presence, social media, other forms of advertising, new products and services, sales force, and personal selling…to name a few.
#5. Lack of Funds
Elon Musk has $1B in the Tesla bank account, but he’s cutting back overhead to ensure he has the cash needed to get to positive cash flow. It doesn’t matter what size you are or how long you’ve been in business, cash can be a huge issue. Sometimes this is due to lack of good asset management. Money might be tied up in receivables, inventory, or overzealous marketing campaigns. More commonly the cash problem is due to the normal ebbs and flows of business. And today, it can be harder than ever to find good sources of financing at affordable rates.
#6. Lack of Time
It is the rare owner who is working under 50 hours a week and feels like everything is working smooth-as-can-be with no additional hours needed. Time management is a huge issue, and a huge percentage of owners acknowledge being lousy at delegating.
#7. Balancing Working ON the Business with Working IN the Business
It is much too easy to get bogged down in performing the work or providing the service and find that no one is selling, marketing, planning, or analyzing. The situation can also be reversed. The owner is spending plenty of time on selling, and then the quality of service drops off since he/she is not paying attention to execution after the order. Sometimes this is an oscillating problem with the pendulum going one way and then swinging back the other.
#8. Economic Swings
Economies go up and then they go down. Certain industries may find themselves going counter to trend. The bicycle industry is in a horrible slump even as the economy is booming. A new product or even a new law can destroy entire sectors of the economy. Consider the categories of business that have been destroyed by smart phones and Amazon alone.
You might think this would be much higher on the list, but, most owners think they have a solution that is far better than the competitor and pay much less attention to the competitor than you think. Of course, if the competing business comes up with a new idea or ad campaign that starts to matter, then it would be much more likely to effect sleep.
#10. Financial Accounting and taxes
Most small business owners are not savvy when it comes to bookkeeping, financial planning, or tax planning. When you don’t know where you stand on these issues, it can be unnerving. How much will I owe the feds and the state in March? Can I afford to take a vacation? Do I have the right staffing, or should I be cutting or adding?
#11. Having No One to Ask About #1 – #11
This could easily be #1. Almost all small business owners report feeling alone. Most feel that they can’t trust family, friends, employees, or suppliers with their honest feelings or assessments regarding opportunities or potential pitfalls. First of all, there is the sense that these other folks won’t even understand the questions or have any insight into the solutions. Even if they do understand the ramifications of various choices, they may become concerned about the future now that they know about the issues facing the company.
There is a time-tested answer to #11 that can help owners sleep calmly through the night regarding the other ten. Napoleon Hill called the solution MasterMinds. The concept was that an owner could surround himself with peers from other businesses who would not only GET the situation, but who could be honest about recommendations concerning the solutions.
Since Napoleon Hill suggested this idea in 1924 millions of small business owners have joined various mastermind groups. But not all mastermind groups are equally successful. It is critical that a mastermind organization have talented facilitators who can help the assembled owners through the process of brainstorming and reaching outstanding decisions.
SoCal MasterMinds is one such company. If you live in the Inland Empire or OC and would like to visit a MasterMind group to see how amazing it is to have a group of your peers helping you through opportunities and challenges, check out https://SoCalMasterMinds.com or call 310-910-1848 and ask for Randy Kirk