Small business owners in the U.S. have a lot on their minds these days. For one thing, about half of small businesses fail within the first 4 years following their launch, according to Capterra, and naturally the owners of those companies wonder if they'll be the next to hit the skids.
What Keeps Small Business Owners Up at Night?
Of course, the concern about their own longevity is just one of the issues small businesses confront daily. To find out what most concerns small businesses, the National Federation of Independent Businesses (NFIB) decided to ask them. The result is NFIB's Index of Small Business Optimism, a comprehensive report with information about everything from job openings and labor markets to budgeting and the cost of inflation.
At the heart of the report are the issues which most concern small businesses, according to small business owners themselves, including the following 8:
- Managing health care: the rising cost of employee healthcare was the number 1 issue cited by small business owners in the survey, and with good reason. According to Forbes, from 2001 to 2015, the cost small businesses paid for each employee's health insurance premium more than doubled, from just under $2,900 to almost $6,000.
- Compliance with government regulations: although the current administration has eliminated some federal regulations, small business owners still confront a host of others, from those associated with the Clean Air Act of 1990 to advertising regulations enforced by the Federal Trade Commission. Those regulations do frequently protect consumers, but they can be a millstone around the necks of small business owners.
- Compliance with tax laws: federal business tax laws are continually changing, and complying with them is a challenge for many small business owners. Those businesses which operate out of the home must, for example, justify a litany of deductions though time-consuming record keeping. But whether a business is or isn't home-based, staying on top of changing tax regulations can seem like a full-time job in itself.
- Maintaining sufficient cash flow: especially for startups, having enough cash on hand to pay employees and monthly bills can be difficult. There's the problem of how to get customers to pay on time without alienating them, and the problem of obtaining a business loan when available funds get tight. There are, of course, solutions to meet this challenge (like using invoice software and robust budgeting systems), but for many, including those whose financial understanding is limited, this can seem like a daunting task.
- Staying focused, and passionate: most people abandon the 9 to 5 grind and start their own businesses because they have the passion to seek more freedom, and a business model they're convinced can succeed. That passion may quickly dry up in the wake of the inevitable failures and disappointments which come with running a small business. In the NFIB survey, losing the passion that motivated them to start their own companies was among the chief concerns small business owners reported.
- Building a customer base: every business inevitably loses customers every year. Those customers need to be replaced with new ones just to stay even—businesses that want to grow will need to replace every lost customer with 2 new ones, and that can be difficult. The challenge is exacerbated by the emergence of digital marketing, which is foreign to many small business owners. Many don't know what SEO, PPC, inbound marketing, content marketing and social media marketing are, much less how to leverage them to grow their businesses.
- Growing too fast: it's natural for new businesses to want a steep growth curve, but that increase in customers and product demand can create its own set of problems. Ecommerce businesses, for example, need to ensure they have adequate fulfillment and distribution networks in place to accommodate sudden growth. Other businesses need to ensure their customer service operations can keep up with the spike in requests for help that come with increased calls and complaints.
- Retaining current employees, and hiring new ones: according to SHRM, the cost to replace an employee is between 6 and 9 months of that employee's annual salary. That places an onus on small business owners to keep current employees satisfied and engaged. In addition, there's the problem of identifying and hiring replacement employees, and of providing them with the training they need to be effective in their jobs.
Small businesses are the heart of the American economy, but given the extraordinary challenges that confront them, they often struggle to stay afloat. Fortunately, business owners don't need to be experts on every aspect of their business operations—there are experienced agencies which can help with everything from regulations to taxes, human resources, healthcare and marketing.
To learn more about the ways our marketing services will you give your small or medium-size business the tools you need to connect with your customers, drive sales and grow your business, connect with us today.