Many people dream of owning their own business. However, in as much as there are many benefits of running your own business, it also comes with some shortcomings. Below are the challenges that face business owners.
1. Management of finances
Cash flow is a key element in running a success business. To be able to keep your business in operation, you should identify reliable sources of finance for your business. You should also come up with favorable ways of managing your finances to prevent your business from becoming insolvent. Most business owners find it difficult to handle receipts, expenses, invoices and issues concerning tax time. They are also unable to acquire money required for growth of their businesses.
2. Increased competition
Due to increase in similar businesses, competition has become high. Competition keeps business owners on their toes because they want to be better than their competitors. This is to ensure that they attain a higher market share for their products than those competitors.
Improvement in technology can become expensive to business owners. This is because they are forced to adopt new systems which involve buying new computers and software packages. With the improvement in technology, consumers may adopt new preferences. Failure to embrace new technology can lead to loss of customers.
4. Business regulations
Some government regulations affect businesses negatively. For example, increase in duty and taxes by the government may eat into business profits. The government can also restrict the hours of operation. For example, an alcohol business may be required open between certain hours of the day. This may prevent a business from maximizing its profits.
5. Choosing the best marketing channels for their businesses
Business owners should be able to identify who their customers are to be able to choose the best marketing channels. For example, if your target customers are the young adults, you can use social media to get to them. However, if your target audience is the elderly, social media may not be appropriate. Other channels such as TV, radio, and newspapers could get the message home better.
6. Business risks
Running a business comes with some risks some of which include financial risk, reputational risk, operational risks, compliance risks and strategic risk. Business owners should be able to identify the various risks that are likely to affect their business to be able to come with ways to manage these risks. Failure to detect and deal with business risk could lead to the fall of business.
7. Retaining your customers
With the increase in competition and changes in technology, keeping your clients can be difficult for you as a business owner. To keep them coming back, you may choose to reward them for loyalty for example by giving them loyalty cards which can be redeemed for prices.