7 Problems in Business and How to Overcome Them
You will learn
- How to prepare for business in the future and keep up with new business technology
- Tips for overcoming financial difficulties and the skills gap
- Ideas for monitoring business performance
There are lots of problems in business that you will need to overcome. We have bought together the seven biggest problems faced by small businesses, and have some handy solutions that you could use to tackle them.
1. Predicting Business in the Future
You will never be able to fully know what is going to happen to your business in the future, but there are some things that you can do to give yourself an edge. Start by gathering detailed research for your sector. If you know what your market is like, you can more accurately predict what products or services your customers will want now and need in the future.
You might want to plan your future and consider what your long-term strategy is for your business. Are you going to start exporting? Do you want to open more stores across the UK? Will you expand your product range or diversify? There are lots of options available to you when you are thinking about growing your business and increasing your resilience.
Your business plan is key to helping you predict future business opportunities. Your plan can help you identify where you need to allocate your resources, where you can afford to take risks and when you should play safe. You can also use your business plan to help you get funding to achieve your growth goals.
2. Financial Difficulties
Financial difficulties can arise at any point – a key piece of machinery could break, a large contract could be dropped, or an accident caused in your workplace could result in hefty fines or replacement costs.
The simplest way to rise above small business cash flow problems is to keep an accurate and up-to-date cash flow forecast. Careful planning and monitoring of your cash flow can help you anticipate problems early and solve them before they threaten your business. Keeping a simple spreadsheet to monitor your monthly income and outcome can be invaluable.
If you are struggling with financial problems, you will need to find the underlying cause of the problem. If you can identify where the problem originates, you can then come up with a plan to overcome it. While you fix the root cause of the problem, you could look in to cutting costs in other parts of your business, and you can see our top tips for that here. Taking lots of small steps towards your overall goal can help to alleviate financial stress.
To replace a broken machine or vehicle, you could look in to leasing or hire purchasing, rather than having to buy the item out right, in order to save you money.
For more guidance on looking after your finance, take a browse through our funding articles and funding finder.
3. Monitoring Business Performance
Monitoring business performance can be tricky and you need to make sure you establish a consistent system for keeping track of things. You will need to establish what your key performance indicators (KPIs) are in your business, and regularly check in to see how you are performing.
Your key performance indicators are things that you can measure which will help you see how well your business is meeting its objectives. These could be things like the number of people ordering from your website, your profits, social media responses, how many products you have manufactured, etc. The list is limitless. You will need to look at what is important in your business, and monitor it.
You might also want to monitor staff performance. Your employees are the back bone of your business, without them you would likely not be able to operate at all, so making sure they are motivated and working efficiently. You should work with your staff to set goals and monitor employee performance. Review these goals with your staff regularly in 1-to-1 meetings, in order to find out where they are succeeding where they might need some support or guidance to achieve their goals.
4. How to Comply with Regulations
For the protection of staff and customers, regulations and safety standards are under continual improvement, but that can make it hard for you to keep up and comply with regulations. An enforcement agency will not necessarily notify you of the changes that they are making, so you need to make sure that you keep yourself up-to-date in order to avoid facing costly charges to your bank balance, and damaging your reputation.
Networking can be a great way to stay in the know. Chatting with other business owners in your sector can help you keep informed to regulation changes. It can also help you to work with other people in the same situation as you to come up with ways to ensure compliance.
You can also sign up to receive email alerts from the government about the changes that they are making to business regulations.
5. Overcoming the Skills Shortage and Hiring Employees
Hiring employees can be a headache, especially when the skills shortage means there are even fewer people to choose from. Without staff, though, your business likely cannot run, so you need to overcome these barriers and get a great team onside.
Taking on apprentices can be a great way for you to overcome the skills shortage, and can save you money on the cost of hiring employees. You will gain an enthusiastic new member who can gain high level qualifications as they work, whilst making sure you have the staff to fulfil the highly skilled jobs in your business. Find out more about apprentices, employing an apprentice, and apprentice funding here.
If you do not think an apprentice will be the right fit for your business and want to hire in a more traditional way, you will need to make sure your job advertisement is attention grabbing and detailed enough that people will want to apply. You can check out our top tips for hiring employees here to help you overcome recruitment problems.
6. Keeping Up With New Business Technology
New business technology is being developed every day and it can be hard to keep track of the latest technology trends in business. However, if you cannot keep up with the latest business tech, you are likely to lose your competitive edge in your industry. If a more efficient production process is developed, for example, that your competitors all invest in which then allows them offer a better price to customers and you cannot, you will lose out.
You might also miss out on opportunities. Think back to the emergence of social media as a way of communicating with your customers. Now, if your business does not have a Facebook, Twitter, LinkedIn, etc., it seems suspicious and can put potential customers off. New social sites emerge, and it is important that you go where your customers are – there is no point tweeting to an empty dashboard. Check out our free guide to social media advertising to get to grips with how to successfully attract new customers using your social media profiles.
How do you actually keep up-to-date with new business technology? You could:
- Have an IT strategy – lots of businesses depend on their IT so it is important to invest in it. Computer updates can be annoying and take you away from your work, but they are very important for keeping you up-to-date and cyber secure.
- Test and trial new products – when new business tech enters the market, trial it out. If it does not have a positive impact on your business, then you do not have to continue using it, but the chances are, it will.
- Build a working relationship with your peers – your competition can be your greatest allies. If they have had problems with some business tech, you do not want to make the same mistakes. Similarly, if they have found something great, you should use it too.
7. Sustainable Waste Management
There are many advantages to having a sustainable waste management system in place in your business. If you focus on wasting less, you will save yourself money in lots of different areas. Lowering your carbon emissions will mean you spend less on electricity and heating; being more efficient with your raw materials will mean you have to purchase less.
In fact, effective environmental waste management can help you make money, diversify your business and increase your competitiveness. Recycling, re-purposing or reusing waste products will mean you can transform what used to be wasted products into high value items and save you spending to have waste taken to landfill. Find out about your responsibilities are when disposing of your waste here.
Why not invest in research and development to help transform your waste products in to profitable materials? For example, one business developed a method for drying out the wood chippings they created in their day-to-day. In doing so, they turned a low-value waste product into a high-value, carbon neutral fuel.
Concentrating efforts into sustainable waste management can help you meet you environmental obligations and is a great marketing tool. If you can show your customers that you are an eco friendly business, they are likely to buy from you over your competition. Find out more about becoming an eco friendly business here.
To assist your creation of an environmental waste management system, you will need to develop a green business strategy. When writing this strategy, you could consider:
Your environmental impact – what are the risks that your business actually poses to the environment? Once you know what these risks are, you can rank them in order of significance so you can prioritise which you need to address first.
Your staff – your staff know exactly how your business operates, so they can be really useful in helping you to identify what are the biggest environmental risks you could cause. Get them involved in your plan, it can make them feel valued and encourage them to accept the resultant changes more easily.
Your response to the risk you pose – having an action plan in place to help you quickly respond to an environmental issue as it arises can limit the damage it causes the environment and your business.
Environmental controls – what measures are you going to put in place to help minimise the risk you pose to the environment?