There is no denying that all businesses today have their challenges. Nevertheless, these challenges can seem much greater and bigger for small business owners with limited resources.
With that in mind, let’s take a look at some of the biggest challenges for small company owners, as well as some advice on dealing with them.
Money management is definitely one of the biggest challenges that face small businesses. If your business is to grow, you need to have enough cash to do so. However, quiet periods or periods whereby people do not pay their invoices on time can cause real problems. You need to have an effective invoice policy in place to ensure that people pay quickly.
Tax can seem like a bit of a minefield for new business owners. The last thing you want to do is erroneously pay the incorrect tax and find yourself facing a huge fine as a result. Some of the main taxes are as follows:
National Insurance – National Insurance Contributions were set up in order to fund a number of state benefits. This includes the State Pension and the NHS. There are various different types of National Insurance. However, Class 1 is the most common. This involves a primary contribution from the employee and a secondary contribution from the employer.
Value Added Tax (VAT) – Next we have VAT; this tax affects most business-related goods and services. The tax is collected at every stage of production and distribution, however, it is technically a tax on the final consumption of goods and services. There are a number of VAT schemes available in the UK to make payment easier.
Pay As You Earn (PAYE) – Next, we have PAYE; this is a scheme that is designed to take income tax from employees when they earn it. If you run a limited company this is especially important. You need to understand your obligations, as you are technically an employee of your company, even if you are the director as well.
Holding onto your key employees and preventing them from moving onto another business can be difficult. Offering training opportunities such as giving your workers the chance to take a Master of Business Administration online can really help to enhance their loyalty. A lack of progression is one of the main reasons workers move on. Other ways to boost employee retention include:
Talking to your employees - find out what matters to them
Offering monetary perks
Offering non-monetary perks, for example, childcare vouchers or gym membership
Improving work conditions
Being flexible with work hours
The three challenges mentioned in this blog post are some of the greatest facing small business owners today. Hopefully, you now feel more prepared to tackle these issues head-on at your company.