Overcome and Adapt: How A New Entrepreneur Can Deal With These Common Small Business Problems
11:50 13 February 2019
Starting your first business is an accomplishment in itself as a majority of people never have the opportunity or drive to do so. Launching a business does not guarantee that everything will run smoothly or the company will ever be profitable. Businesses that have had massive success have encountered problems during the infancy of the company. The key is overcoming these challenges and adapting business to market and client demands. As a small business it will be far easier to adapt than at a large corporation as approvals for changes can take weeks or maybe months depending on the size of company. The following are common problems/issues a first time entrepreneur can face and how to deal with them in an appropriate fashion.
A new entrepreneur might feel uncomfortable demanding payment from clients as they do not want to lose them. Reduce these issues by setting favorable payment terms with clients when writing up the contract. Companies that want to pay after completion need to understand that it takes money to complete a project. Half up front and half after completion can help fund the project as well as keep cash flow healthy. Finding the right small business invoicing software, for more information visit https://beebills.com/ as it can be a huge help. At times all a client needs is a reminder to pay as some companies work with quite a few vendors depending on industry. If a client pays late or does not update you on payment put a pause on their projects. Deadlines for projects are just as important as deadlines for payment which is what you can tell the client.
Hiring Low Performing Employees Constantly
Nailing down a hiring process that consistently brings in great hires is important at a small business. A few less than stellar employees not only can cause the company to miss deadlines but their quality of work can lead to clients looking elsewhere for help. For this reason it can be wise to use freelancers in your area as a sort of a tryout. Those that perform and surpass expectations can be eligible for full-time employment. Attracting top talent is not as difficult if you have work from home and other remote work opportunities. Reaching out to those that you have worked with in the past to see if they need a new employment opportunity is also wise. Knowing a person’s working style is one of the most important parts of a new hire.
Investors Trying To Bully You Into Making Certain Decisions
The process of finding investors to fund your small business could be the most difficult part of starting a business. This becomes more difficult when the investors want a return almost immediately. Investors threatening to take their money back if you do not make a decision that could harm the company long term need to be put in check. There should be an understanding of how input will be taken from the investors as their word is not law if it hurts the company. Luckily for many online based businesses the capital that is needed to start the business is not high like that of creating a manufacturing business. Managing investors also needs to be done honestly so do not show them “projections” that are unrealistic. Keep expectations reasonable so an investor is not waiting to make their money back during the first month of business. Cutting ties with an investor is the final step if nothing else has worked as you cannot compromise the health of the business simply because someone invested.
A Large Company Is Now Your Competitor
A large company entering your business’ space can be one of the most intimidating things that can happen to a new entrepreneur. The larger company might have money to throw at problems but the flexibility of a small business can help them compete. Marketing and advertising need to be creative as it can be tough to compete with large budgets if you take a traditional route. When worried about clients leaving for the larger company you should offer a discount for a long term contract extension. The last thing you want to do is lose long time clients that comprise a majority of monthly income.
Former Employees Hurting The Company’s Reputation
Former employees talking poorly about your company can burn bridges with potential clients. Having employees sign paperwork like an NDA to keep them from disclosing what happened during their time at the company is wise. With this being said you are not going to be able to part ways with everyone and have them be happy about it. Certain people are going to be vengeful even if their termination was completely warranted. Do not let a disgruntled former employee impact the success of the business by using the appropriate legal documents in the pre-employment paperwork.
Issues will arise and should be met with a good plan to solve any problems. Take time to see where you can improve processes and reduce the chances for issues repeating themselves.