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7 problems in business and how to overcome them

7 problems in business and how to overcome them

In this article you’ll 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’ll need to overcome. We’ve brought together the 7 biggest problems faced by small businesses and come up with some handy solutions that you could use to tackle them.

1. Predicting business in the future

You’ll never be able to fully know what’s 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’re 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. Your business plan is most effective when regularly updated and considered against your market research. Check out our guidance on business plans here.

Man leading his team in a planning session for their business futureMan working with his team on a whiteboard planning together the future of their business

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’re struggling with financial problems, you’ll 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 into 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 into leasing or hire purchasing rather than having to buy the item out right to save you money.

For more guidance on looking after your finance, take a browse through our funding articles and funding finder

Man and woman looking together at a calculator talking about their business finances

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’ll need to establish what your key performance indicators (KPIs) are in your business and regularly check in to see how you’re 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’ve manufactured…the list is limitless. You’ll need to look at what’s 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’d likely not be able to operate at all, so making sure they’re 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 a 1 to 1 meeting to find out where they’re succeeding where they might need some support or guidance to achieve their goals. You can find out more about hosting a great 1 to 1 meeting with your staff here.  

Man and woman looking at a computer to monitor their business performance

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 won’t necessarily notify you of the changes they’re making, so you need to make sure that you keep yourself up-to-date 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’re making to business regulations. Subscribe here

Of course, at How’s Business we keep up-to-date with business changes and gather lots of support together to help you stay compliant. You can download our free guide to regulations here and read about the new auto enrolment laws here

Two women looking at regulation paperwork in an office

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’ll gain an enthusiastic new member who can gain high level qualifications as they work, making sure you have the staff to fulfil the highly skilled jobs in your business. It’s never been a better time to hire an apprentice, thanks to the government scheme that contributes significantly to training costs. Did you know an apprentice increases your weekly productivity by £214? Find out more about apprentices here.

If you don’t think an apprentice will be the right fit for your business and want to hire in a more traditional way, you’ll 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.

Woman being interviewed by two business peopleWoman being interviewed by two business people

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 can’t keep up with the latest business tech, you’re 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 can’t, you’ll 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 doesn’t have a Facebook, Twitter, LinkedIn etc. it seems suspicious and can put potential customers off. New social sites emerge, and it’s important that you go where your customers are – there’s no point tweeting to an empty dashboard. Check out our guide to social media advertising to get to grips with how to successfully attract new customers using your social media profiles.

But 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’s important to invest in it. Computer updates can be annoying and take you away from your work, but they’re 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 doesn’t have a positive impact on your business then you don’t 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’ve had problems with some business tech you don’t want to make the same mistakes. Similarly, if they’ve found something great, you should use it too.

Young manufacturer looking at technology and recording thing on his laptop

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’ll 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 into 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’ll likely buy from you over your competition. Find out more about becoming an eco friendly business here

Man in protective clothing looking over a warehouse

To assist your creation of an environmental waste management system, you’ll 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?

 Call to action to download a free cyber security guide

Summary

There are lots of problems in business that you will need to overcome in order to succeed. We’ve listed 7 of the most common issues that come up for business owners, and given tips for managing them.