I’ve personally faced several hurdles over the years, some of which led to the failure of some business ventures. Entrepreneurship often involves several failures and lessons-learned before experiencing your first win. How you respond to these hurdles has a direct impact on the success or failure of your business.
I recently spoke with a dozen small business owners to discuss common hurdles we all face and how to overcome them. You undoubtedly will face some of the same hurdles in the future, so use the advice below to help you be fully prepared to handle them if and when you encounter them.
“A lot of small business owners assume they need access to a large sum of startup capital in the beginning. While it can make some things easier, it can also lead to reckless spending and poor decisions.
When you take on an investor you are giving up a percentage of your business and small business loans can pile debt on your shoulders that results in a lot of stress. Bootstrapping is not a bad option, as it allows you to grow your business at a manageable rate without taking on debt. It might take a little longer, but retaining 100 per cent ownership of your business and remaining as debt-free as possible will benefit you in the long run.”
– Jennifer Shima, Owner of The Bacon
“A lot of times a concept will take off much quicker than initially anticipated, resulting in more demand than the business is prepared to handle. If you can’t keep up with production or don’t have the manpower to service incoming requests it can result in an early collapse of your business.
Social media has the viral-power to take a new business from obscurity to household name overnight. Make sure you have a plan in place that scales with your growth. A surge in demand should never be the downfall of your business.”
– Jamil Rahman, CEO of Aucto
“You could have the best product or offer the best service, but if your target customers don’t know you exist you will never survive. There are multiple ways to place your offer in front of your ideal customer, with paid ads offering an instant solution.
Facebook ads allow small business owners to place a very specific offer in front of a highly-targeted audience. Facebook’s large user base combined with their extensive targeting options makes it possible to start attracting customers and generating sales on day one.”
– Scott Grossman, Founder of The Grossman Law Firm
“A lot of small businesses will focus on getting new customers and clients, while neglecting their accounts receivable. Making sure your customers are paying on time helps to keep your business cash flow positive, and operating above water.
Organization is key, which is why accounting and invoicing software like FreshBooks is something every small business owner should embrace. The account snapshot allows you to see how much outstanding revenue you are waiting on, and take action to collect it ASAP.”
– Eric Ritter, CEO of Digital Neighbor
“Your employees are everything. Who you hire directly impacts your business, and the wrong talent can ruin the synergy of any business. Just one cancerous team member can be the downfall of your business.
Anyone can look good on paper, so it’s important that you expose a potential candidate to your environment and the team members he or she will be interacting with. A strong team chemistry is just as important, if not more important than the achievements and accomplishments listed on a resume.”
– Adam Steele, CEO of Loganix Citations
“Rather than spreading your marketing budget thin across several advertising channels in the beginning, pick the one or two of the strongest options, and dedicate the majority of your budget and time mastering those.
Paid advertising like Facebook ads and Google AdWords allows you to see exactly how much ROI you are generating. When you are dealing with measurable results you can then scale your efforts and experience serious growth. Then, as your revenue grows, so can the number of different marketing channels you use.”
– John Morgan, Co-CEO of Stillwater Dwellings
“Being a small business owner can be extremely exhausting and overwhelming. Long hours and little to no time off is the reality every SMB owner experiences. It’s important that you carve out time in your schedule for family time and your own personal hobbies.
Time away from the office is mandatory if you want to avoid burning out. Establish a cut-off time that you honor daily to ensure you have adequate family time, and also make sure you take some time off every weekend to unplug from work. That little time spent recharging your batteries is priceless.”
– Michael Tario, Founder of Tario & Associates
“A lot of small businesses fail because they drown in overhead. It’s important to operate as lean as possible, especially in the beginning. I would advise SMB owners take full advantage of technology in order to reduce overhead and operating expenses.
Operating virtually can save a tremendous amount of money on rent and migrating everything to the cloud allows you to go paperless, eliminating expensive printers, ink/toner, paper and physical storage space.”
– Sean Flynn, Founder of Flynn & Associates
“As a business owner, your energy is contagious. If you look depressed or have a negative attitude it’s going to spread throughout your entire team. You need to be a positive leader, no matter how bad a particular situation might be.
Your team needs constant motivation to perform at its peak level. I have found that simple compliments and praise goes a long way. Your team wants to feel like they are an important component of your business, and they are, so make sure they know it. A simple “thank you” and acknowledgment can provide the motivation needed to help them power through any challenge or task.”
– Ariel Chiu, CEO of Wonderstruck Weddings
“It costs a tremendous amount of money to attract customers, so wouldn’t it make sense to find ways to increase the lifetime-value of each customer? If you have to spend money each time you generate a sale it will cut into your ROI.
Establish ways to upsell your customers and continually market to them, creating long-term customers. We found email marketing to be the most beneficial, allowing us to constantly market to a pool of customers that have previously purchased from us.”
– Rob Richardson, CEO of Newcastle Training
“It’s important that you stay on top of your accounts receivable and accounts payable, while also maintaining cash reserves at all times in case of an unexpected emergency. Always know what your breakeven point is monthly, and use software like FreshBooks to keep up on everything.
I’ve seen many businesses stay on top of their cash flow by offering an incentive for early payment. Offering your customers and clients a small discount for prompt payments can help you constantly stay cash flow positive.”
– James Hannon, Founder of Hannon Legal Group
“Your business will never grow unless you find ways to scale your revenue. This can be accomplished a number of ways. You can create upsells, which increases your average purchase, or raise your prices and market your product or service as a premium brand.
There are many businesses that survive by generating the same amount of revenue year-after-year, but in competitive industries, you need to constantly be focused on growth. Experiment with different strategies to identify multiple ways to scale your revenue. You can never have too many options.”
– Ben Richardson, CEO of Acuity Training
Being a small business owner isn’t easy. There are always going to be ups and downs. It’s how we react and handle the hurdles we face that dictates whether the business will be successful or fail. The majority of small businesses fail, so use the insight above to help you avoid becoming part of that statistic.
This is an optimized post from the FreshBooks Blog and was originally published in February 2017.