Owning and running a traditional small business can be many peoples dream, but often the perceived benefits of having more spare time, more time flexibility and more money are not the reality. Having owned and run five traditional small businesses, I've experienced many of the frustrations that come with 'being your own boss'. If you're considering buying a business, here are 5 common small business pain points that you need to consider:
Time flexibility/freedom - Unlikely. The reality is most small businesses will demand more of your time than any job. There are so many facets to running a small business and if you're a one or two person operation, you'll likely be run raggard wearing a number of different hats. Aside from actually doing the income producing work, you'll also need to be advertising/marketing, scheduling, managing stock and inventory, contacting leads, quoting, following up on quotes, staying on top of bookwork.....and the list goes on and on.
More Money - Maybe, maybe not. Many small business owners experience an increase in cashflow compared to any job they've had, but this may not translate into profit and increased income. The increased cashflow compared to previous employment may make it feel like the business is doing well, but there are so many associated expenses that the end of year accounts can paint a very different picture. Hopefully, after the owner has paid themselves a wage, the business has at least turned a small profit. Even if this is the case, only a very small percentage of small business owners are properly compensated for the amount of time, effort, sacrifice and stress that is often the unforseen cost of running a small business.
Cashflow Management - Depending on the type of business and trading terms, payment on completion or delivery may not always be the case. One of the biggest causes of stress is chasing customers for payment. This can severely impact the success of a business and even the ability to operate from day to day. Many small business owners find themselves in a postion whereby they're waiting on debtors to pay so that they can settle supplier invoices in order to purchase more stock to complete the scheduled work. Operating so close to the wire like this is incredibly stressful, inefficient and unproductive, yet such common place.
Consistent Workflow - In each of my businesses, one of the biggest difficulties was maintaing consistent workflow. In order to keep the work flowing, I had to always have my foot on the throttle with regard to marketing/advertising, contacting leads, quoting and quote folloup. Not being forever vigilant on any of these tasks would result in a slowing of workflow and revenue. Wondering if the next week or month would be booked out was the cause of many sleepless nights. With one of my businesses, I was able to achieve a position whereby all my business was coming from referral and repeat business and my advertising spend was minimal, but this can take years to achieve and is certainly the exception rather than the rule.
Managing Staff - The old adage 'Its hard to find good people' seems to be becoming more and more the case. Managing employees and/or contractors is never easy. Finding people that will care for your business and customers as much as you do will be difficult. Employees turning up late or not at all, taking liberties, providing substandard work etc.....it's all part of running a business. Be prepared to have to deal with all the problems associated with hiring and managing staff to help run your business, and when you do find good people, do everything possible to keep them. The cost of re-hiring and training new people can often far outway the extra cost of retaining good people.
Whilst owning and running a small business can be incredibly rewarding, it always comes with many challenges. If you're considering Self Employment, its easy to focus on all the benefits, but be sure to also consider the potential pain points before investing any business opportunity.
Owning and running a number of small businesses has taught me exactly what I want from a business, and what I dont want. I've now moved away from traditional small business to build a business online, which has done away with many of the pain points experienced in traditional small business. To learn how I'm doing this, get access to my free 7 part video series here.
Comment below and tell me about your small business Pain Points......