Worst To First: Overcoming the Challenges of a Difficult Small Business
"You’re opening a restaurant?! Good luck with that ...."
Or maybe you've heard something like, "I hope you know how difficult it is to get into the retail industry. Not a lot of people make it."
And let's not forget all the other small businesses that get a bad rap for being a little more challenging to get off the ground.
But don't let that discourage you from following your passion and succeeding at it. Let's break down 3 of the biggest challenges facing small businesses in these fields and discuss how to overcome them.
Lack Of Capital
It's safe to say that a lack of capital can be a death sentence for any small business venture, but it's especially true for riskier startups in the food service and retail fields. Profits in these sectors don't tend to materialize quite as quickly as in other industries, and a source of cashflow is essential for absorbing some of these early difficulties and keeping your doors open.
The first solution is to secure funding. Many entrepreneurs immediately try to do so through loans, but these can be difficult to obtain even in the best business climates. Improve your odds with loans guaranteed by the Small Business Association (SBA) tailored specifically for that purpose. Plus, these loans are often easier to acquire.
If loans prove difficult to get or you need additional funding, drawing on your existing resources is an option.
- Rollovers as Business Startups (ROBS) allow you to access 401(k) and other retirement resources.
- Home Equity Lines of Credit (HELOC) enables access to existing home equity.
Consider these options, but always be mindful when putting personal assets on the line to fund your small business.
Recruitment And Retention
Finding and keeping good workers is one of the greatest challenges facing small businesses today, especially startups in retail, food, and transportation. Even with the expansive labor pool created by the Covid-19 pandemic, it's often difficult to find the right people for physically demanding jobs with extended hours. But doing so is well worth the effort.
Hiring mistakes come with a cost—turnover, even for low-level employees, averages a whopping $3,500. Losing an employee effectively sacks your productivity twice, as you lose their hours and spend yours recruiting a replacement.
Start the recruiting process by thinking about the skills and experience you need a new hire to bring to the table and what role they'll play in your business. When developing the job description, be clear about what you expect and focus on the essentials. Job hunters won't waste time with excessively long or wordy job descriptions. And by avoiding any ambiguity, you'll spend less time interviewing underqualified applicants.
When it comes to recruitment and retention, your best bet is to offer competitive compensation and benefits. Look at what other small businesses offer in your industry and make yours a desirable workplace. Offering competitive pay guarantees a better chance for the top employees looking to work in your field. Health insurance plans are also a significant factor for many job seekers, and providing benefit options is an excellent way to recruit and retain employees.
Time might not be quite as material a resource as capital or labor, but it does require the same management to make the most of it. If you're not intentional with your time management, you and your business will suffer.
A big part of active time management is developing SMART goals, which are Specific, Measurable, Attractive, Realistic, and Time-Based. Once you have your long-term goals for your business organized in this way, create a to-do list for each goal that includes all the tasks necessary for reaching it. These individual tasks will then become their own short-term goals, all of which should be organized in the SMART fashion. By breaking down your goals into manageable steps, you can keep track of your progress and modify them as necessary.
It's just as important to schedule time for you. Finding a work-life balance is necessary to avoid burnout and fatigue, leading to a lack of passion for your business. If you're feeling stressed due to constant interruptions such as phone calls and emails, make a point to block off time in your schedule to decompress. No work-related phone calls, texts, or emails—just relax and recharge so you can be invested when you return to work.
Small Business Success Stories
Even if you can secure funding, recruit and retain employees, and masterfully manage your time, there will always be other challenges. For more solutions and inspiration, read these inspiring success stories of businesses that started small and conquered their challenges to become giants.