Business Problems

Here is a short article on problems that ALL businesses face.

Cash
Finding it and managing the cash flow. It’s hard to get and there is never enough. If you are a fast growth company you can rapidly outgrow your available sources, if you are an underperforming company you can’t get it. The majority of companies don’t manage it well. Overdrafts, credit cards and leasing/hire purchase are the most commonly used forms of finance. Loans from friends and family and new equity are the least common sources. Commercial loans, grants and overdraft had become substantially harder to obtain for a significant minority of businesses.

Most businesses experience some problems getting paid on time by their customers and with debt recovery. Good credit control helps to prevent this becoming a serious problem.

Six out of ten of small firms have a bad credit rating, according to a well-known credit reference agency. Having a good credit score is not only important to enable you to borrow funds, but will also affect your ability to secure good terms on trade credit.

Sales/marketing effectiveness
This goes back to planning and leadership. Many businesses have not taken the time to decide what their USP (Unique Selling Point) is. They try to compete in conflicting areas, such as lowest price and highest service. One takes away money and the other adds cost. Part of the planning process for a new product should include a very clear answer to one simple question, “with all of the products and service available to my customers why should they buy from me?”

Competition

Unless your business is in a particularly specialised niche, chances are some companies in town already do the same thing you are doing. Those competitors might have a number of advantages, including an established customer base, experienced employees and better pricing power. Evaluate the level of competition and research your competitors ahead of time to mitigate these risks.

Licensing Requirements

Fields as seemingly innocuous as flower arranging, interior decorating and cutting hair all have strict licensing requirements in many parts of the country. No matter what the nature of your business or how many years of experience you have, check out the licensing requirements thoroughly before you open your business. If you fail to get the required business licenses before you open up your business, you could be subject to significant fees and even the closure of your business.

Employee Problems

When you own a business, the employees you hire are the face of your business. If you hire the wrong people, you put your entire operation at risk. If your employees provide poor customer service to the public, the reputation of your company can suffer, and in extreme cases that poor customer service could put you out of business. Your business can also face significant risks if the employees you hire engage in unethical and illegal activity, from embezzling funds to committing crimes while on the job.