What are three concerns of small business owners that can contribute toward high stress levels?

Starting a business is a significant achievement for many entrepreneurs, but maintaining one is the larger challenge. There are many common challenges every business faces, whether they are large or small. These include hiring the right people, building a brand, developing a customer base, and so on. However, some are strictly small business problems, ones most large companies grew out of long ago.

Here are the five most significant challenges for small businesses.

• A small business should not allow itself to become dependent on a single client.
• Having professional help with money management frees up a small business owner to focus on operating concerns.
• It’s essential to find the right balance between working long hours and business success.
• A small business owner should not create a situation where the business could not continue in their absence.
• Starting a small business may be different than simply working as a freelancer.

If a single client makes up more than half of your income, you are more independent contractor than a business owner. Diversifying your client base is vital to growing a business, but it can be difficult, especially when the client in question pays well and is on time. Having a client willing to pay on time for a product or service is a godsend for many small businesses.

Unfortunately, this can result in a longer-term handicap because, even if you have employees and so on, you may still be acting as a subcontractor for a more significant business. This arrangement allows the client to avoid the risks of adding payroll in an area where the work may dry up at any time, and all of that risk is transferred from the larger company to you and your employees. This arrangement can work if your main client has a consistent need for your product or service.

Having enough cash to cover the bills is a must for any business, but it is also necessary for every individual. Whether your business or your life, one will likely emerge as a capital drain that puts pressure on the other. To avoid this problem, small business owners must either be heavily capitalized or pick up extra income to shore up cash reserves when needed. This is why many small businesses start with the founders working a job and building a business simultaneously. While this split focus can make it challenging to grow a business, running out of cash makes growing a business impossible.

Money management becomes even more important when cash is flowing into the business. Although handling business accounting and taxes may be within the capabilities of most business owners, professional help is usually a good idea. The complexity of a company’s books increases with each client and employee, so getting an assist on the bookkeeping can prevent it from becoming a reason not to expand.

The hours, the work, and the constant pressure to perform wear on even the most passionate individuals. Many business owners—even successful ones—get stuck working much longer hours than their employees. Moreover, they fear their business will stall in their absence, so they avoid taking any time away from work to recharge.

Fatigue can lead to rash decisions about the business, including the desire to abandon it altogether. Finding a pace that keeps the business humming without grinding down the owner is a challenge that comes early (and often) in the evolution of a small business.

It is generally better for a business to have a diversified client base to pick up the slack when any single client quits paying.

If you get hit by a car, is your business still producing income the next day? A business that can't operate without its founder is a business with a deadline. Many businesses suffer from founder dependence, and it is often caused by the founder being unable to let go of certain decisions and responsibilities as the business grows.

In theory, meeting this challenge is easy—a business owner merely has to give over more control to employees or partners. In practice, however, this is a significant stumbling block for founders because it usually involves compromising (at least initially) on the quality of work being done until the person doing the work learns the ropes.

Growth should never be the enemy of quality. A small business needs both.

Even when a business is not founder-dependent, there comes a time when the issues from growth seem to match or even outweigh the benefits. Whether a service or a product, at some point, a business must sacrifice to scale up. This may mean not being able to personally manage every client relationship or not inspecting every widget.

Unfortunately, it is usually that level of personal engagement and attention to detail that makes a business successful. Therefore, many small business owners find themselves tied to these habits to the detriment of their development. There is a large middle ground between shoddy work and an unhealthy obsession with quality; it is up to the business owner to navigate its processes toward a compromise that allows growth without hurting the brand.

The problems faced by small businesses are considerable, and one of the worst things a would-be owner can do is go into business without considering the challenges ahead. We’ve looked at ways to help make these challenges more accessible, but there is no avoiding them.

On the other hand, a competitive drive is often one of the reasons people start their own business, and every challenge represents another opportunity to compete.

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America has over 30 million businesses that employ over 60 million people, according to the U.S. Small Business Administration (SBA). Although the unemployment rate spiked during the pandemic to 13 percent in 2020, it came back to near 5 percent in 2021. Dealing with labor issues is just one of the top small business challenges 2022 will bring, among the following areas of concern.

1. Supply Chain Slowdowns

One of the top small business challenges in 2022 is overcoming supply shortages and late deliveries due to the supply chain crisis at American seaports. As supplies become more scarce, prices go up. The supply chain tie-up that started during the pandemic is a complex puzzle that usually isn't thoroughly explained in one newscast. Three giant ocean shipping alliances that own the world's biggest ships have been taking up so much space and time at ports it's creating a chain reaction.

Mixed in with this chain reaction include labor shortages, high storage fees, and pandemic fears that have created a surge in consumer demand. All of these factors contribute to the supply chain crisis. It's not clear what the solution will be for returning to normal. One of the solutions to logistics issues since the pandemic broke out in 2020 has been establishing alternative pickup options based on social distancing.

2. Labor Shortages and Attracting Talent

Another leading small business challenge of 2022 will be recruiters filling job vacancies created by the "great resignation" from 2020-2021. Many Americans quit during the pandemic to rethink their family life and career choices. But even before the pandemic struck, specific industries such as healthcare and trucking were experiencing labor shortages. The labor crisis goes deeper than people getting sick of their jobs due to pressures created by the pandemic.

Mental health has entered the equation for managing employees. That means employers need to be more mindful of mental well-being in the workplace. Elevation of stress levels through increased multitasking contributes to workplace deficiencies in terms of more paranoia, reduced focus, diminished loyalty, and decreased productivity. Small businesses must be particularly concerned about attracting and nurturing loyal talent due to limited resources.

3. Management of Remote Work

Attracting the right talent can be achieved partly by offering remote work, which allows you to tap into a global pool of experienced professionals. The topic of remote work, in general, is one of the most critical small business challenges for the new year. Remote work isn't going away because it helps companies cut costs with less need to spend money on multiple workstations.

According to Harvard Business Review, the number of digital nomads, who work online from anywhere, blossomed to over 7 million Americans in 2019, then to over 10.9 million the following year. Some popular digital nomad jobs include writing, graphic design, digital marketing, consulting, web design, and software development. The cloud allows for videoconferencing to bring together staff meetings and collaboration among coworkers.

4. Pandemic Concerns

Another one of the top small business challenges in 2022 will be the continuing threat of pandemic outbreaks. The longer the COVID-19 pandemic persists with Omicron or other variants, the more consumers will stay home and buy online. Consumers are expected to use their smartphones even more in the coming year. They will also communicate more via social media channels, partly as a form of social distancing.

Even though online shopping is expected to escalate, physical establishments must be prepared to return to regular foot traffic. The industries most adversely affected by the pandemic have been hospitality, retail, education, healthcare, manufacturing, construction, and business services.

5. Securing Adequate Funding

The pandemic has led to shutdowns that have resulted in severe financial losses for small businesses. But the good news for some entrepreneurs is that resilient firms often bounce back stronger after being tested by significant challenges. One of the ongoing small business trends that began before the pandemic has been tightening budgets. Trying to do more with fewer people and less spending can be achieved through automation. For many small companies, a solution to business survival has been reducing salaries while creating more flexible work schedules.

6. Improving Your Content Marketing

Working with a digital marketing firm can do wonders for bringing traffic to your website. A firm experienced with SEO, PPC, and e-commerce solutions can help monetize and promote your website. Digital marketing campaigns can attract new leads through search engines, email, and social media.

You can cross-promote through guest blogging by networking with other business owners, and industry thought leaders. Influencer marketing through social media and blogging can help identify new sales channels. Small business owners need to understand the value of providing followers with original expert commentary via multiple marketing channels.

7. Developing Better IT Solutions

Small businesses can overcome many of the problems posed by the pandemic by upgrading their IT networking. The more your business becomes cloud-based and digitally interactive, the more you need effective oversight of your IT systems. If your company doesn't have the resources to hire an in-house IT team, it's advantageous to outsource to a reputable local managed services provider (MSP). The most modern MSPs embrace AI, IoT sensors, automation, and machine learning software encompassing self-healing solutions.

8. Working Toward Sustainability Goals

Sustainability is a central theme for all businesses to cut expenses and waste to maximize productivity and profitability. Digital marketing is a sustainable solution because of the efficiency it provides. Dealing with inflation will be a huge challenge for startups, so they'll need to spend money carefully. Online freelancing in the gig economy is a form of sustainability because it cuts transportation costs and reduces strain on traffic and the environment. By 2020 there were over 77 million gig economy workers in the United States, as over a third of the workforce now engages in freelance work.

9. Countering Employee Burnout with Work-life Balance

Employee burnout happens when a job becomes monotonous, and advancements deteriorate. To maintain a positive customer experience, you need a team of happy people that want to share their happiness with customers. Creating a family-first workplace environment is a step toward work-life balance. Showing empathy toward staff members humanizes the workplace.

Essentially, business leaders must find the right balance between professional growth and improving personal quality of life. To accommodate a work-life balance, some businesses are devoting space to recreational activities. It's also helpful to encourage periodic breaks and a sense of openness. Employees should feel free to approach managers with any questions or concerns about their jobs.

10. Investing in New Technology

Many large corporations have already invested in digital transformation, including IoT proliferation, automation, AI, and virtual environments. According to Forrester Research, 63 percent of businesses praise automation as helping their operations move forward during the pandemic. Not only can automation speed up tasks that humans find redundant and boring, but it can also help fill gaps caused by labor shortages.

Embracing 5G will help facilitate more agile digital transformation. Tech industry experts expect global penetration of 5G adoption will be 40 percent by 2024. Machine learning software is another area businesses should look into for gaining a competitive edge. The software can improve cybersecurity, business forecasts, and customer support.

Conclusion

The most significant small business challenges 2021 will define which companies are resilient and grow from this learning experience. Aiming for sustainability is a common theme in the solutions to these challenges. Digital marketing and e-commerce both play into sustainability. Find out more from the e-marketing consulting experts about improving your online endeavors and moving forward digitally.