As the economy begins to pull away from COVID-19 lockdowns and restrictions, small business owners shift their focus. Their attentions turn toward internal forces that threaten their livelihood instead of external, government-mandated rules and regulations. Let’s look at some of the current challenges small business owners face.
#1. Small Business Owners May Be Too Dependent on One or More Clients.
Diversifying is a word on many entrepreneurs’ lips. For a business owner, this concept might take the form of having a good number of clients. When you rely too much on just a couple of clients, your business can suffer if even one client leaves.
Some people feel that relying on one client for more than half of your income puts you more into the independent contractor status instead of the business owner. Whether you agree with that sentiment or not, realize that it can be dangerous to oversimplify your client base.
#2. Undercapitalization Is Another Problem for Companies.
Sometimes not having enough money happens because inadequate funds were invested in the business. But for other small business owners, money management can be the culprit.
Shoring up cash reserves can be challenging, especially for industries hit hard by COVID-19 shutdowns and restrictions. Owners of start-ups might need to work a second job or find other sources of income.
Then, when the company seems to have enough cash flow, small business owners might consider getting help with money management, accounting, and investments.
#3. Owner Fatigue Often Strikes Small Business Owners
One prevailing myth is that small business owners spend a lot of time on the golf course. It’s true that some schmoozing might be necessary to woo clients and maintain the business relationship. However, most business owners find themselves working long hours, usually longer than their employees. Starting and operating a company are no easy feats.
It’s crucial that owners get enough rest. Fatigue can affect their health and their bottom line as mistakes pile up.
#4. Some Small Businesses Depend Too Much on the Company’s Founder.
This may be a common problem perpetuated in part on the founder’s hard work. Small business owners wear many hats as they form, build, and maintain their companies. But delegating, even when there’s a learning curve, could strengthen the company by building a deep reserve of qualified employees.
Also, small business owners can do a lot to ensure their company’s success by preparing the business to run smoothly even after they’re gone. Including their business in their estate plan is an excellent first step. Companies with co-owners should discuss a buy-sell agreement with their business lawyer as soon as possible.
#5. Balancing Business Needs Can Be Overwhelming for Small Business Owners.
As mentioned above, business owners might be involved in every aspect of their business. At some point, the company might be more successful by dropping services or product lines. However, the owner might still have emotional ties to the company’s early days of doing business.
Here’s another situation where sharing the responsibility might be helpful to overwhelmed owners.
Small Business Owners Can Benefit from Working with a Small Business Lawyer.
Do-it-yourself legal work often has unintended and unpleasant consequences. However, your Florida business lawyer can shoulder some of the burdens while helping small business owners avoid some of those consequences.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.