Running a business is a journey filled with exhilarating highs and daunting lows.
When you're enjoying the highs, it's often when you're having the feeling that got you excited about self-employment in the first place.
You're solving problems or bringing joy to people, all while being your own boss.
You're enjoying the profits; reaping the rewards from your hard work.
You're finally able to make a meaningful difference to something you've always been passionate about.
Along the path to success, however, are challenges that test nearly every business owner.
Which of these "6 Common Perils of Business" sound familiar?:
The relentless pressure of financial uncertainty is looming over you
Your work life balance has gone out the window and you're working late
Keeping up with the competition is causing stress
You've lost sense of time - the days drag on, yet they're melting into the next
You're feeling uncertainty - sometimes unexplainably, or you worry over your preparedness for economic shifts or unforeseen events
Lastly, the isolation - going through any of the above challenges, all while feeling like nobody could ever understand what you're facing.
We hear about these issues a lot and we know they can leave even the most seasoned entrepreneur feeling overwhelmed.
That's why we've included resources for each of the 6 Perils of Business in this article. Maybe only one of these issues applies to you, or maybe it's all of them - that's okay.
The goal is to get you thinking and solution-oriented - this article won't solve everything overnight but when facing adversity, being in a solution-oriented headspace is important. Sometimes just having a few paths forward is enough.
Table of Contents
What's stressing you? Tap on one of the 6 Perils below to skip to that section, or read on to see the article in its entirety.
Financial uncertainty poses a constant challenge for small and medium-sized business owners, but proactive strategies can help mitigate its impact.
Firstly, a few tips on general financial management: start by creating comprehensive budgets for both your personal and business expenses. Understand the income needed to sustain your lifestyle and ensure your business can support it during lean times. Regularly review your budgets, comparing actual expenses to projections and making adjustments as needed.
Debt management, cashflow and customer relationships are also critical aspects of financial stability.
Debt management: While borrowing can provide necessary capital for growth, it must be approached with caution. Negotiate favourable terms, and ensure your business can comfortably meet repayment obligations.
Cash flow and customer relationships: Prompt payment of creditors is essential, as late payments can exacerbate cash flow problems. Maintain open lines of communication with suppliers and clients, fostering strong relationships built on trust and reliability. Develop a system to manage outstanding invoices and encourage timely payments from creditors.
Reclaim control over your time and create a more harmonious balance between work and life.
Firstly, it's crucial to recognise the need for change. Acknowledging that your current work-life balance is unsustainable is the first step towards finding a solution. Reflect on your personal and business vision for the future, and develop a well-thought-out strategy to achieve that vision. Here's a few things to consider when developing your strategy:
Delegation is key to freeing up your time and reducing your workload: Learn to trust your team and delegate responsibilities accordingly. Hiring good people who share your vision and values can make all the difference in building a business that operates smoothly even when you're not around.
Another method, particularly if you're self-employed, is to investigate ways to achieve office automation. See if generic, repetitive tasks can be taken care of via outsourcing or even AI.
Lastly, remember to prioritise self-care and set boundaries! Schedule those regular breaks, go for that walk and take that time to relax and recharge! Sometimes it's easier said than done, but it is a must if you want to avoid burnout. Too often the the temptation to work excessive hours or sacrifice your personal life for the sake of your business is there, but ultimately sustained productivity, happiness (and success) is achieved through a healthy work-life balance.
While it's tempting to chase after every potential opportunity, SMEs must prioritise their efforts wisely to maximise profitability and long-term success.
To stay competitive in today's dynamic business landscape, it's essential for small to medium-sized enterprises (SMEs) to understand their unique value proposition and focus on meeting the needs of their ideal customers.
Identifying your ideal customer starts by conducting a thorough analysis of your product or service offerings. Once you've identified your top-performing products or services, you've found your ideal customer segment and you can allocate your resources accordingly. This may involve adjusting your marketing strategy to highlight your most profitable offerings, refining your product or service offerings to better meet customer needs, or even considering partnerships or referrals for areas where you may not excel.
In the pursuit of competitiveness, it's often beneficial to specialise rather than generalise. By directing more focus into a specific area of business where you excel, whether it's a particular product line, service offering, or niche market segment, you can carve out a unique position in the market. When you can hone in on that one aspect and excel at it, you'll find that profitability follows suit, setting you apart from competitors.
Check out the article below for an easy way to analyse your products and services to identify your ideal customer.
Effective time management isn't just about ticking off tasks; it's anticipating fluctuations in demand and navigating the ever-changing rhythms of business life.
Anticipate the fluctuations: Just as businesses experience peak periods, they also encounter quieter times. Anticipating these fluctuations and planning ahead can be instrumental in managing your time effectively. Whether it's gearing up for the holiday rush or preparing for seasonal shifts in demand, starting early allows you to stay ahead of the curve.
Align your priorities with your long-term goals. Understand that time freedom isn't just about working fewer hours; it's about creating a business that thrives even when you're not tethered to it. Define your non-negotiables—whether it's spending more time with family, pursuing personal passions, or achieving financial security—and let these guide your daily decisions.
Counteract economic downturns and unexpected emergencies through proactiveness, adaptability, and communication.
Strategic Planning and Financial Resilience: In the face of economic uncertainty, proactive measures are key to weathering the storm. Assess cash reserves and plan how to effectively retain them. Trim costs where possible and maintain strong relationships with both customers and suppliers. By assessing pricing, managing inventory, and reviewing overheads, you can bolster your business's financial resilience and navigate choppy economic waters with confidence.
Diversification and Adaptability: Seek ways to diversify your offerings in response to market challenges and consider how you can adapt your business model to changing conditions. Explore alternative revenue streams, leverage existing skills, and seize new opportunities for growth, even amidst uncertainty. Flexibility and adaptability are the life rafts that can keep your business afloat in times of crisis. Read "A Success Story of Horses and Engineering" to see an example of a business that has effectively implemented this strategy.
Communication and Collaboration: In times of crisis, effective communication is paramount. Keep stakeholders informed of any disruptions, contingency plans, or changes in operations. Nurture strong relationships with customers, suppliers, and employees, fostering a sense of trust and unity amidst uncertainty.
Additional reading:
Firstly, check out these two articles:
While it's a topic we've heard plenty about, COVID makes for a great case study:
Read Surviving the Coronavirus - Possible Recession Imminent for tips that largely apply to any crisis situation.
Watch Covid 19 One Year On: How is NZ Business doing? Phil Wicks shares his observations for outcomes.
Entrepreneurship: a rewarding endeavour, but one that can be isolating without a support network and a combination of personal and business related activities.
If you have one, what's your current support network like? Are you involved in activities in your industry and/or do you have many activities outside of work? Read below and reflect:
Building Your Support Networks: If you haven't already, seek out opportunities to connect with other business owners. Consider joining local business groups, networking events, or online communities like Small Business New Zealand which are tailored to SMEs in New Zealand.
Participating in Industry Associations: Become actively involved in associations relevant to your sector. Engage with industry peers through conferences, workshops, and collaborative projects to not only expand your professional network but also discover opportunities for knowledge sharing, mentorship, and partnership development.
Prioritising Work-Life Balance: Strive to achieve a healthy balance between work and personal life. Allocate time for activities outside of work that bring joy and fulfillment, whether it's spending time with family, pursuing hobbies, or engaging in community activities. Cultivating a well-rounded lifestyle enhances overall well-being and reduces feelings of isolation.
Embracing Digital Connectivity: Leverage digital platforms and technology to stay connected. Video conferencing tools, social media platforms, and online forums are a great way to maintain communication, collaboration and support networks regardless of geographical distance.
Additional reading:
Conduct a self-assessment to identify strengths and weaknesses.
The "6 Common Perils of Business" - They're common for a reason.
They're by far the most frequent issues clients come to us with, and whenever we've written articles on these matters they tend to get the most attention.
Why these issues affect business owners, however, often varies. The recommendations in this article are somewhat broad to assist a wide range of business owners in various situations, though we acknowledge it isn't a one size fits all scenario.
Want to take things a step further? Give the BSP bizQuiz a shot.
Ten sections, ten minutes. Answer questions pertaining to both the 6 perils and other sections of business such as leadership, marketing and more. You'll receive downloadable PDF "scoresheet" including both your score and personalised reccomendations.
Interested in trying it out? Start the BSP bizQuiz here.
