The 3 problems of small businesses

In a recent discussion with a small business banker, he identified three problems faced by most small businesses. They were:

• Cash flow
• Planning
• Staffing

In my Blog entry last week, I mentioned the problems from Quote to Cash, where many small businesses don't generate invoices on a timely basis.  If your only costs are time, and you have enough money coming in, then late invoicing may not be a big problem, and will not have a big impact on cash.  But if you have materials to buy, cash flow becomes a big problem.  You can at least reduce that problem, by issuing invoices on a timely basis.
Next week, I will describe a common problem that I have encountered with some small businesses who see having time to generate invoices as a problem.
Planning is the second area identified by the banker.  Often planning is what people do when they are not busy reacting to the challenges of reacting to day to day business issues.  Planning should outline what you want to achieve, so that you can focus your time on the important issues.  If you don't plan, you tend to react to business issues as they come up.  You focus on what's urgent versus what's important.  The key is to identify what is important to you, and spend your time on activities that help you get there.  That is what planning is all about.
Staffing is the third area mentioned.  As small business owners, we have a challenge finding staff, who have the skills necessary to do the job.  We can't afford the very skilled, because they are too expensive.  We hesitate to use specialists, because they are too expensive.  So we hire junior people and tell them what we want.  We then have to tell them over and over and they don't seem to get it.  What's wrong with this picture?  When we get into business, we start with a specialty and learn that we have to do many other things.  Most of these things are difficult to delegate to junior staff and we end up doing it ourselves.   Who is the busiest person in the office?  The owner.

All three of these problems are process issues.  I will provide some insight into solutions in my next few posts.

For anyone who reads this, if you have other problems as a small business owner, please let me know.