Owning a successful small business can be incredibly rewarding. However, life as CEO of your own company will bring with it a number of challenges that it’s best to find a solution to, sooner rather than later.
- Money Management
As well as actually making money, however you plan to do this, one of the biggest challenges you’ll face is managing your finances effectively. This means keeping an eye on monthly expenses, payroll, taxes, marketing budgets, inventory costs and more.
Small business owners must either be heavilys capitalised or have incredibly efficient accounting systems that ensure you are always flush with cash to cover day-to-day running costs, like rent and employee salaries.
Without good accounting, it can make it difficult to grow a business, and if you, unfortunately, do run out of cash, this can stunt your growth and force you to take out extra finance.
As you grow, so will the complexity of a company’s books with each client and employee you bring on. One of the best things to do while you’re scaling is to invest in good payroll services for small businesses in the UK, as well as saving you time, they’ll help you stay on top of your finances.
- Client Dependence
Small businesses are notorious for undiversified client bases often with profits relying on one single client that makes up more than half of your income. This is even more common if you are an independent contractor, rather than a small business owner with staff working under you.
Diversifying your client base is crucial to growing a business and giving your organisation more security in light of any future potential disruptions. Sometimes you may need to sacrifice your relationship with a reliable client to take on several smaller clients, but other times you’ll simply need to take on more staff to handle more accounts.
No matter how you approach this problem, remember that more clients mean you can avoid the risks of adding payroll in an area where the work may dry up at any time. Risk is transferred from larger companies to you and your employees, and in uncertain times and competitive markets, this can be a dangerous position to be in.
- Burn Out
You and your small team can easily get burned out when you’re suffering from limited capacity. Many employees wear multiple hats when working for smaller operations, and this will undoubtedly lead to fatigue at some point when people are overloaded with too many tasks across multiple departments.
Also, many business owners — even successful ones — get stuck working much longer hours than their employees. This is because they fear their business will collapse in their absence. The truth is, this attitude can lead to poor decisions about the business and a lack of perspective.
When possible, try to establish a pace that keeps the business productive without grinding down your team and lowering morale. There is a fine balance to strike, but as many have shown before you, it is definitely possible!
- Founder Dependence
We’ve all worked in companies that are too reliant on their founders. They may be great at their jobs, but it can be a burden for the growth and productivity of your company when everything is too closely tied to one or two individuals who must oversee every stage of operations, from business growth and accounting to sales and marketing.
A business that can't operate without its founder lacks sustainability. If you are a manager who is unable to let go of certain decisions and responsibilities despite having a good team under you who are perfectly capable of taking your projects and running with them, you should consider how you can get to the stage when you’re eventually confident in taking a step back.
Save Yourself Time with Payroll Outsourcing
We help many organisations, new and old, find more time to focus on the things that help your company grow. If you’re looking for reliable and secure payroll services for small businesses in the UK, get in touch with Pay Check!