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What’s keeping business owners awake at night?

Entrepreneurs and business owners are innovative, focused and highly motivated people, consistently nurturing their skills and talents to drive their business model. However the path to success can be rocky and doesn’t come without its challenges. Successful entrepreneurs keep on top of the challenges by quickly identify their pain points, the financial impact and implement plans to overcome them.

So what is a pain point? Pain points are problems, issues, or challenges that could get in the way of business growth that need to be overcome for success. These challenges can often affect the business owner in various different ways, physically and mentally as well as financially and they must be kept an eye on. Here are five of the most common challenges that are keeping business leaders up at night, along with some ideas on how to address them.

1. Cashflow

Nothing can be more worrying than financial problems. Cashflow problems can manifest in many different forms. You may need investment ahead of getting ideas to market,  or have a customer paying outside the trading terms and therefore you have staff and other costs to pay before you get cash in. These types of scenarios can put your business, employees and own finances in jeopardy.

Things you can do:

  • Construct a cashflow forecast to see the problem before encountering it.
  •         Have a well capitalised company.
  • Have access to additional funding such as savings, a private investor or debt funders.
  • Ensure you have maintained a good credit history.
  • Make a healthy margin on sales of goods & services.
  •         Invest in a part-time Finance Director. Their help will become the best move you made.

2. Competition

No matter how good your product or service, you will only have an edge for a while before competition becomes inevitable. Competitors can pose a serious threat to your business, but can also be the spark that lights new innovation and drives you forward. The challenge lies when you need to develop but also need to keep going whilst this new element is being worked on.

Things you can do:

  • Check your competition regularly – best to know what’s going on as soon as possible.
  • Survey your customers survey to find out what they want before your competition does.
  • Stand out from the crowd and be a leader not a follower in your sector.
  • Constantly innovate and invest in new ideas, processes and products.
  • Check your finances regularly (see step 1) to tide you over any innovation period.

3. Employee Performance

Do you fully understand the needs and requirements of the your workforce? A pain point that can affect not just the business owner, but the whole company, is the employees. If you have an unhappy team you will have poor performance. In turn, poor performance will lead to unhappy customers, a decline in sales and escalating employment costs.

Things you can do:

  • Be approachable, ensuring your employees are happy and looked after.
  • The ‘praise-as-you-go’ mentality can often be more effective than longer term pay rewards and bonuses.
  • Don’t assume pay increases & bonuses are the most important or only reward to motivate staff. Hold goal setting meetings with the staff – ask them to put down what they want to achieve in work and personally outside work – it shows you care about ‘why’ they come to work. The ‘why’ for them is never the same as your ‘why’. You may be able to reward them through the year by something other than money that is on their personal goal list.
  • Initiatives like “flexi time” help give teams a sense of variety when it comes to working hours.

Virgin Group founder and business leader Richard Branson put this into perspective by saying:

“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”

4. Technology

Technology in the workplace can help redefine your strategy and revolutionise your business model. Make sure you are on top of  IT and have someone on hand to solve tech faults otherwise downtime can affect profits, time and in serious cases, customers.

Things you can do:

  • Redefine your business management policies & procedures and use cloud software.
  • Adopt best practice cyber essentials protection for your company’s cyber security.
  • Ensure your IT systems & software is regularly maintained by an expert.
  • Ensure software is regularly updated and only approved software is used on company & personal devices.
  •         Have an IT policy that everyone is aware of.

5. Marketing

Business owners now have many new ways to market their company to their target audience, but this also poses new challenges that can make or break a business. Your competition is no longer local, but global thanks to the internet. Developing an effective marketing plan with your team to achieve the greatest return on investment can be a challenge, especially if you don’t have the skills or budget in place. Social media channels might be free, but it will cost you time to build up an online community following. So as the business owner, how do you conquer this?

Things you can do:

  • Get help from a strategic marketing specialist – it will save you time and money in the long term.
  • Invest in the right CRM system to help effectively manage and build stronger customer relationships.
  •         Assign a budget for marketing activities. You won’t get anywhere without one.
  • Assign ownership of marketing activities to one person keep a track of spend and measure return on investment.

If you find yourself hitting pot holes on the road to success like the above this is normal and in fact expected. You will notice in most areas that finance is a big factor. This is why investing in a part-time FD is a wise move. You cannot do it all on your own and nor should you have that burden. Spread that stress by spending money wisely on people that are specialists and can save you money in the long run.

Now is the time to plan for year – making 2019 more focus and organised.

If you would like to know more about the role of the Finance Director or would like our help, please contact Stuart Smith at Watersmiths on 07785 556 450.