5 big problems for small businesses

Myhrtoolkit provides HR solutions for small businesses, as such we feel it is important small and medium businesses face some of the biggest problems head on and find solutions.

Cash flow and capital

Small businesses often struggle to find start up capital or manage cash flow, this is through no fault of their own but a small business is unlikely to have hundreds of thousands of pounds sitting in the bank as a ready resource for things such as rent, utilities, wages and also investment in marketing and new processes. Getting paid can prove to be problematic as larger companies may put you on 90 day payment terms, and small companies may have their own cash flow worries, therefore delaying payment as much as possible.

Getting a good invoicing system can help make this process easier, you also need to keep up to date with your cash flow forecasts and forecast projects or seasonality.

Competitions and margins

Most industries will have competition from larger businesses who are able to do deals, trying to stay competitive means you will cut profit margins to win work which means there is very little room for error before a project or product becomes less profitable.

It is important for business owners to add value to their services through a unique selling point or offering, also if you are using man hours these need to be quoted to include correspondence and project management or before you know it you could be doing weeks of work going back and forth but only getting paid for a few days.

Finding and keeping the right staff

Most business owners asked find recruitment to be very expensive, in time to find someone and then to train them. It is for this reason staff retention is much more profitable than a high turnover of staff. Small businesses feel this more than larger corporations and one team member leaving can make a big difference to productivity.

Staff illnesses/absences/maternity

Just as staff leaving can be a blow to a company, so can staff absences. Any absence from illness, holiday or maternity/paternity leave can have a big affect on staff productivity and without a big capital or cash flow it can break a small business. It is important to try to manage staff holidays and absences and try to build up contingency plans for illness and maternity.

Admin and processes

Many small business owners have a huge grip with admin and setting out processes, they want to to their job, the job they loved enough to set up their own business, not sit filling in paperwork, doing admin, accounts or doctors notes. If you have a small business it is worth investing in a personal assistant or software solutions that will help you manage processes and admin. This will save you a lot of billable time.

Many of the issues facing small business owners are relating to staff, managing them, keeping them happy and recruiting. Myhrtoolkit offers a unique online HR software that is idea for small business owners.