6 Key Challenges That Small Business Face

Every day we meet and interact with business owners. We talk regularly about what is working well for them, as well as the struggles and challenges that they are facing.

With this article, we wanted to share with you the 6 common challenges that we see small businesses facing. These are problems that a quality bookkeeper can help you resolve.

Cash Flow Issues

Cash flow issues are one of the most common reasons that a business fails. Whilst a business may look good on paper, if there is no money in the bank then you will always be struggling. A good bookkeeper can help keep your books up to date – this means you can manage cash flow projections over a year. A good bookkeeper can also help ensure all of your invoices are sent out and all of your invoices are paid on time. Further, if your books are up to date then it means that you have a better chance of borrowing money from a financial institution should you want extra funding for growth.

Lack of Business Plan and Improper Goal Setting

They say failing to plan is planning to fail. Whilst you do need to be able to adapt to changing situations, a strong business plan at least gives you a roadmap for success. Well thought out SMART goals are a great way to measure the success of your business, and whether you are on the right track. Proper strategies for all aspects of your business, with proper systems in place, maximise your chances of success.

Differentiating Themselves in the Market

Chances are that you have competitors in the marketplace. Chances are that there are businesses out there that people may purchase from instead of your business. They may not be offering exactly the same product or service but they may be competing for the same customer dollar that someone may spend on you. You need to make sure that you have a unique selling proposition and a well thought out marketing plan to stand out in the marketplace.

Adapting to Changing Market Conditions

The recent Global Pandemic highlighted a problem that many businesses face. When market conditions changed immediately and suddenly, many businesses found themselves unable, sometimes unwilling, to adapt. THis is a large challenge for many businesses still and one that needs to be rectified.

Declining Profits

Market conditions can cause the cost of doing business to increase, however profits do not always increase at the same time. It’s possible that raw costs, labour costs and other costs go up, but you may not be in a position to increase your own prices. A great bookkeeper can help you identify ways to reduce your costs and increase your profits.

Lack of Proper Financial Management and Financial Literacy

Another big problem that many business owners have is a lack of proper financial management and digital literacy. They just don’t understand their numbers  or how to keep track of their finances. It can be time consuming and it can be stressful, so for many it is just left as an afterthought.

 With this article we have shared with you 6 common challenges that many businesses face. If you see any of these challenges in your business, the services of a great bookkeeper can help. If you’d like a no obligation chat about how we can help your business, get in touch today.

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