Owning a business can be rewarding, but it does not come without its challenges. The good news is: every challenge has a solution. As a business owner, you will need to prepare for the challenges you will face.
Government Regulations
What licensing do you need? Where can you operate? How much will you pay in taxes? This can seem so daunting that it stops many people from staring in the first place. There are some basic regulations that every business owner should know. Firstly, the Clean Air Act of 1990 says you can’t contribute to air pollutants. This can apply to a range of things for a business owner such as operating factories, or even vehicles. You should also consider advertisement regulations. False advertisements can be detrimental to your reputation and also get you in legal trouble. States have their laws on advertising regulations, so before you put it out there it pays to be well versed in your state laws. Government regulations can seem like a daunting task to any small business owner. The best way to combat this is to do your research and become well versed in the laws that apply to your business.
Taxes
This is another huge one that few people seem to understand. Misunderstanding your small business taxes will almost always result in loss of money, or worse. It is important to stay compliant with your taxes and know what you are responsible for. If you are home-based, keeping track of your expenses is essential to turning a profit, so make sure you are always up to date on your bookkeeping. Also, pay attention to federal income taxes, you will need to stay up to date on this as it is ever-changing. Knowing your tax rate is essential.
Funds
So many business owners struggle with cash flow and funds for their business. Especially in the first few years, it can be extremely rocky. This can be one of the biggest challenges you face in your business and it will set many back. Larger companies have larger margins and can usually afford to keep the lights on, but a client missing a payment can be detrimental to a small business operation. There are a few ways of making sure your small business keeps a healthy cash flow. Most important is to budget correctly, and make sure your overhead costs are sustainable. If you are still having cash flow problems after that, a business line of credit can be a great help.
Time
Another big challenge facing small business owners today is time. Not enough time to spend on your business, yourself, or your family. Business owners surely get stretched in many directions. Likely, you started a business that you are passionate about and want to spend time on, but as a small business owner, it can be hard to regulate your time properly. Many people also start businesses to have more control over their life. When you make your own hours and don't work for anyone else but yourself there is a sense of freedom that small business owners enjoy. But, this can also take a turn for the worse. No one watching your work hours means you can always have dinner with your family, but it also means that you can work all night. The smaller the business the more tasks you have to do on your own. It is important to stay passionate about your small business while also making time to have a life or else you will soon get burnt out.
Hiring
If you are successful enough to bring someone new on your team it can be a big responsibility. Especially the first employee you hire. It’s exciting but also nerve-wracking. Perhaps you have become accustomed to representing your business all on your own. You want to hire someone who will care about your operation just as much as you do. All this while offering a benefits package that cannot quite compete with larger companies. You also are combatting the taxes and other fees associated with hiring an employee- not to mention their salary. It’s a daunting task. The best advice here is to look out for a personality that will fit well with the small business world, someone who is looking to grow in a company can be a great fit if you are in a position to grow. Be good to your employees as best you can and they will return the favor.
If you are facing any of these problems as a small business owner, know that you are not alone. We speak with hundreds of small business owners daily and hear all about these challenges. It’s important to remember why you started your business in the first place and keep that passion alive. If you are facing problems with cash flow, as many do, First Union Lending can help with a business line of credit or one of our other lending solutions tailored to small business owners.