Wednesday, August 23, 2017

6 Common Financial Issues Facing Small Businesses in 2017

business money issues
Money is usually the biggest concern for small business owners. Particularly in the beginning. If you are just starting out in business, the best ways to make sure you are well equipped to face any financial situation that may arise are having a comprehensive financial forecast and being aware of some of the more common problems. Here is a look at 6 of the leading financial issues facing small businesses in 2017.

Rise in Costs

Generally, the cost of everything is increasing. Your rent will have increased, paper suppliers are charging more, utilities are more expensive than ever, and businesses taxes and insurance can be expensive if you don’t take care. The best way to deal with these issues is generally by budgeting carefully and shopping around. But, make sure you never skimp on the essentials. To get indemnity liability insurance might be an expense now, but long-term it could save your business a small fortune.

Wage Increases

Minimum wage is under more scrutiny than ever. Governments are comparing their salaries with those around the world and putting more pressure on businesses to pay well. While big companies have no problem with this, it can be difficult for new start-ups to cope. In many cases, you might find yourself torn between young, inexperienced but cheap staff and older, more experienced staff who expect better pay. The answer is a mixture of both. 

Lack of Preparation

One of the biggest financial problems for many small businesses is that they just aren’t prepared for the costs. They think of the obvious things but neglect the smaller, essential costs. Be thorough in all of your budgets and forecasts and make sure there is always some cash left over for emergencies and unexpected costs.

Lack of Accuracy

Being inaccurate is another huge problem which can have dire consequences. The odd miscalculation or error in recording data might seem small, but these things add up and can create huge issues. It is important to be as accurate as possible when it comes to the financial management of your company. So, check everything. And then check again.

Poor Pricing Management

If your business deals in products or services, it’s important to price them correctly. Many small businesses seem to just guess at a price or go with something that sounds right instead of taking the time to develop a clear and well-researched pricing strategy. Take your time with this; it could make or break your business. You need to make a profit and attract customers; it can be a tough battle, especially for an unknown company without a reputation to help them secure custom.

A Lack of Flexibility

This is a problem for large and small businesses alike. They set their prices, they chose suppliers and property and then they stick with it. Either because it doesn’t occur to them or they can’t be bothered to change. However, this is incredibly foolish. Markets are changing all of the time. So be prepared to change with them. 

Take steps now to ensure these issues don’t stand in your way and your business will have a much better chance of success.

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