Ask any small business owner what’s holding their company back or preventing them from expanding and reaching their true potential and they’ll likely quote any number of reasons. The most popular obstacles, in no particular order, seem to be:
• Difficulty in finding and retaining qualified workers.
• Problems and costs imposed by having to conform to national and European regulations and red tape.
• Lack of overall consumer confidence and economic uncertainty.
• Keeping up to date with and implementing the latest, mainly communications, technologies.
• Access to adequate capital and operational funding.
Of those, lack of funding by banks and access to capital is popularly believed to be the most onerous burden any small business faces. However, research by the Federation of Small Businesses (FSB) suggests that may not be the case. Some 76% of small businesses the FSB surveyed earlier this year indicated that they were perfectly able to secure adequate funding. More than half used credit cards (we’re talking very small companies here, often with no more than two employees) and around 40% had no problem obtaining commercial bank loans. Only two percent got funding from venture capital firms while so called “angel investors” accounted for a fifth of the funding options taken up by the survey respondents. So if it’s not access to adequate capital and cash flow support that’s holding back small businesses, what is causing the problem?
Various surveys suggest that the most significant barrier any small business faces in an attempt to grow is the lack of a clear plan because many small business owners just don’t have the time to think strategically. Often they are far too busy running the company and managing day-to-day problems like cash flow. They simply don’t have the hours or energy to devote to planning or strategy. That lack of a plan can in fact make cash flow problems worse by wasting money on tempting, but pointless, projects.
The main thing holding small businesses back therefore may be the very nature of the leadership within a small business context. If the founder of a company is too hands-on and doesn’t focus on being a “leader” rather than simply a “manager” things can drift aimlessly and expensively into trouble. Equally, if the business owner fails to get competent managers and staff on board either through recruitment or by outsourcing those roles they would have performed, this too could eventually cause the company to stop growing and fail.
About the Author:
This guest post comes from WorkBooks.com. A Web-Based CRM and Business Applications provider to help small businesses increase productivity and performance through efficiency gains.
Image credit: Richard Croft [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
- Small business owners risk running themselves into the ground due to staff absence (premierlinedirect.co.uk)
- SmallBusinessLoanRates.com Sees Business Skyrocket as Small Businesses … – PR Web (press release) (prweb.com)
- US Small-Business Owners Go Without Pay; UK Helps Its Entrepreneurs (ibtimes.com)
- Small Business Humor: Slow Payments (paysimple.com)
- Extending Middle Class Tax Cuts for 98% of Americans and 97% of Small Businesses (whitehouse.gov)