Biggest Challenges Facing ”Small Businesses”

Many surveys shed light on a wide range of problems facing small companies daily, both internally and externally.

External problems Small Businesses

External problems are countless, including the state of the economy, the high Cost of insurance and taxes, red tape, health and safety, non-bank lending, competition, transport issues and staff skills shortage, and the list goes on.

Internal problems Small Businesses

Internal problems are no less strenuous: Small Businesses

Cash Flow Management Small Businesses

Finding and managing the cash flow “It’s hard to get and there is never enough”. If you are a fast growth company you can rapidly outgrow your available sources, if you are an underperforming company you can’t get it. The majority of companies don’t manage it well. Overdrafts, credit cards and leasing/hire purchase are the most commonly used forms of finance. Factoring and invoice discounting, loans from friends and family and new equity are the least common sources. Commercial loans, grants and overdraft had become substantially harder to obtain for a significant minority of businesses Small Businesses

Most businesses experience some problems getting paid on time by their customers and with debt recovery. Good credit control helps to prevent this becoming a serious problem.

Clear Plan Small Businesses

Most businesses don’t know how to plan. Lack of a plan worsens the cash problem by wasting cash chasing tempting diversions, and throwing money at problems. Equally important is revising your plan according to changing economic and business conditions and to ensure your survival in the recession. Small Businesses

Leadership

This issue takes many forms. It is frequently in the form of depth of leadership. The founder of the company is too much hands-on and a) does not concentrate enough on his primary role as a leader rather than a manager; and b) fails to enlist support of competent managers and staff behind themeither through recruitment or by outsourcing. This eventually causes the company to stop growing and eventually could lead to failure. Directors should always remember their core role and responsibilities.

hpa runs an extensive range of courses, conferences, seminars, development programs and services specifically designed by directors for directors to help them improve their personal and professional effectiveness for the continued success of the business.

Sales & Marketing Management

This leads back to planning and leadership. Many businesses have not taken the time to decide what their USP is. They try to compete in conflicting areas, such as lowest price and highest service. One takes away money and the other adds cost. Part of the planning process for a new product should include a very clear answer to one simple question, “with all of the products and service available to my customers,why should they buy from me?”

As an hpa member you can receive free and independent advice in finance, marketing, sales, supply chain issues by contacting the consulting & training Service (19472 – www.hpa.com.eg)

Small Businesses

Execution

• This may be the biggest of all:
• Strategies that are developed are never executed
• Improvement projects fail
• Leaders spend less that 1-hour per month on strategy
• Employees don’t know their company’s strategy. (This is a direct result of top management not documenting and communicating it.) Communicating with employees is crucial.
• Organizations don’t have meaningful performance measurements in place or carry out regular performance analysis.