Running a small business is hard. After all, it means that you are responsible for a variety of activities, including providing quality customer service, managing finances, hiring employees, and overseeing the operation of your business. Many business owners take on a lot more than this!
With all of this responsibility, there will be challenges that arise and many of them will require financing. This is where small business working capital can help. When you have access to a business line of credit or small business loan, you can overcome even the biggest challenges.
Top 5 Challenges Faced by Small Business Owners
Business owners face a variety of challenges as they seek to grow their business. If you don’t have the necessary capital, it will make these issues even worse. Below, we will list five of the most common business challenges that you may face and explain how having access to working capital can help.
However, before you start applying for business funding, you must make sure that you consider your situation and the challenges you are facing.
Low Cash Flow
When you’re running a small business, there is a variety of costs that you are responsible for, including purchasing inventory, paying rent/utilities/miscellaneous bills, paying your employees, and more. These add up quickly, which is why many business owners find themselves without the cash flow to cover last-minute costs.
For example, let’s say you are a restaurant owner and one of your ovens breaks or maybe you own a retail store, and you want to invest in marketing. In addition to these costs, you also must still pay rent and other bills and meet payroll. This can be difficult if you do not have access to working capital financing.
When you apply for business financing, it allows you to save some of your working capital for when you are in need. Plus, you won’t have to cut funds from other areas to afford growth plans or emergency expenses.
When you’re running a small business, it’s necessary to keep your staff happy. When you’re short-staffed, your employees’ performance is likely to decline. Don’t risk working for your staff too hard or they may find a job that gives them a better work/life balance.
Being understaffed can also affect the productivity of your business. If your sales are increasing, it can be exciting- but if you don’t have the employees to manage those new customers, it can be challenging to serve them.
By applying for a small business loan, you can hire more employees.
When your equipment or tools break, it can be stressful. Even if your equipment is not broken, you may be working with obsolete equipment that doesn’t work very well. When you neglect repairs and/or updates, the quality of your products/services is likely to decline.
By applying for a working capital loan, you can replace equipment that is broken or obsolete- or have equipment repaired if it can be.
Increased Rent/Costs Associated with Physical Location
Over time, the physical appearance of your business may become run down- which could negatively impact your sales. Most consumers prefer to visit businesses that have an attractive, clean appearance. If you find yourself in this situation, it may be time to consider moving or overhauling your business.
Rent increases can also cause financial stress, which is why a working capital loan may be able to help. Once you receive your loan, you can pay for moving costs, rent increases, or physical maintenance.
Limited Marketing Resources
Marketing is critical for small business owners. After all, you need to keep your current customers engaged while also recruiting new ones. Unfortunately, many small business owners don’t have the resources to advance their marketing.
A successful marketing strategy for your small business may include things like printed flyers, paid social media posts, online advertisements, and more.
If you want to improve your marketing efforts, think about what is working and what is not. This will allow you to determine the marketing tactics that you need to invest in. Also, don’t disregard new ideas because you don’t have the cash flow- consider a working capital loan to fund them.
Before you apply for financing, it’s important to take the time to consider your short- and long-term goals for your business. This can help you decide the next best step. If you need help evaluating your situation, contact Array Financial. We can help you get your goals in order and determine your needs as well as the solution to those needs.