10 Challenges Faced By Small Business: Ways to Overcome Them

Small businesses have to cope with many challenges from the beginning, which can also affect their performance in the coming times. The problems faced by small businesses can range from supplies to financing and more. Sometimes, they come across ethical issues in a business where they may have to make harsh decisions. This blog will talk about the small business problems that wind up the new entrepreneur and how to overcome business problems.

Business problems faced by entrepreneurs and tips for small business owners

The common factor starts from their almost zero brand awareness in the market and competing with bigger players. Let’s check them one by one.

1. Lack of capital

Financing is a headache for many new business people because any business thrives on quality. And to bring the quality, you need to invest a good amount of resources for the production or service. Some of the reasons for lack of financing are lesser availability of loans, not getting them sanctioned because of poor creditworthiness at the start. Even there is a problem of unawareness of the various financing options and schemes provided by the government to the new traders.

The other problem is that many people borrow money from non-banking institutions at higher interest rates due to the above-listed conditions that will affect their business in the coming future. And even the banks and other financial institutions require you to submit collateral against the loan taken. Since the loan amount is a bug when starting a business, the collateral often doesn’t match the same, leading to rejection. To save yourself from financing problems, you can check out the various financing methods in your state. The government also provides low-interest loans for new businesses; you can check with the government site of the Ministry of Commerce and Industry of GOI. Other funding sources are angel investors, venture capitalists, and pool money from your relatives and friends.

2. Maintain the production line

Either you can profit per good sold or take some considerable profit due to huge volume sales. You need to make this thing clear with your business and need to maintain the production line. Your products shouldn’t be inferior to the already present in the market, as you will get no customers. To maintain the quality, you need to devise or use new technology that provides you products that are low cost without compromising on quality.

3. Time Management

You will easily vent out in this fast-moving world where every day, a new competitor will stand out to take your business down. It is one of the common problems people face as they will be too exhausted in the overall process. You need to manage both times and work efficiently to align your business in the growing direction. You have to hire people who can take care of the work and save you some workload for the business. You also need rest between the heavy work and need to spare time for your family and friends. Never measure success by compromising your time with your family and someone that you love the most.

4. Lack of Managerial Skills

Some of the common business problems and solutions for any small-scale business are that they lack managerial skills to manage things in their business efficiently. For a long time, people who are doing the business will know the importance of managerial skills that are very detrimental for the company to steer in the right direction. Also, the managerial position needs a good salary because the industry pays them well, and hence you will need to shell some money out of your business for these ranks in your organisation.

5. Marketing Problems

If you have quality products at affordable pricing and are still not making sales, you may need to focus on the marketing domain. Small businesses are generally unaware of the power of marketing as they tend to think that since their products are good, people will flock to buy them. That is not the case, and you need to invest in the marketing team to advertise your product and bring it to people’s attention. The market already has many competitors for your business, and hence you will need to bring these products in front of them. Try to leverage the salesperson and business development associate and use them for generating new leads for your business. You can check the digital marketing that covers a wide area and people with efficient and targeted advertisements.

6. Robust supply chain

When we think about the manufacture of chips, we generally believe only potatoes and the chips-making machine are required. This is wrong as the chips go through a complete supply chain before coming out for sale. It will include packaging, transportation, quality checks, and more. Hence, you need to make a complete, robust supply chain for your product because the products will not be out for actual sale until that.

7. Cash flow management

As a business, you know the importance of filing taxes and legal permits. Similarly, the balance sheet and cash flow statement are important to analyse your business. The cash flow helps you determine where the actual money is coming from and where it is leaving. The liquid cash you currently have will be shown in the cash-flow statement, and you will know the actual working capital that is with you. Analyse the statement and make logical decisions based on the current condition of the capital.

8. Creating a Budget

A budget helps you determine future investments based on past financial and business analyses. It will help you steer your business in the direction and tell you where you need to invest in the coming times.

9. Creating Robust Accounting System

It is on which your whole business will be based, and that’s why it is important to create a robust accounting system for your business. You can use automated software like OKCredit for financial management and OKStaff for staff management services to save your time.

10. Taxes & GST filing

As a business owner, you need to file your taxes on time. The OKCredit app can help you generate a consolidated account statement to file your taxes. You can even outsource the work to experienced CA, although it will cost you money.

Conclusion

Starting a new business, you will face many business problems. Lack of finance, resources, managerial skills, lack of supply chain is some of the common problems faced by small businesses in India. However, you can have the solution to each of them, if you consult some experienced business people. These business problems need you to go and invest your time in learning new concepts that will help you further.

Also read:

1) Best Tips for Customer Retention for a Small Business
2) Tips to Understand Your Market while Starting a Small Business
3) Tips for Businesses to Overcome the Covid Blues - Revival Tips for Businesses
4) What are the keys to success when operating a small scale business?
5) OkCredit: All you need to know about OkCredit & how it works.

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FAQs

Q. What are some common business problems faced by small businesses in India?

Ans. Some common business problems are lack of finance, lack of resources, lack of control on the complete supply chain, no managerial skills, no marketing, and more.

Q. How can you check your financial management without hiring accountants?

Ans. You can use automated software like OKCredit that is solely built for the financial management in your business. This software is easy to use and provides a good return on investment.

Q. How to tackle the financing problem for my start-up?

Ans. You need to check various financing options like angel investment, venture capitalists, government-subsidised funding, bank loans, and more to finalise the best for you.