What keeps you awake at night? We did some research to see just what comes up as the top 7 concerns that keep self-employed small business owners awake at night.
Here are our findings:
Let’s now take a closer look at each of these issues and what they mean.
It is not surprising that Cash Flow is top of the list for most people starting a business.
One of the most important concepts when it comes to your business is cash flow.
Cash is the lifeblood of your business. You need cash coming in so you can pay bills, buy inventory and fund your lifestyle. Without good cash flow, i.e. the cash coming in exceeding the cash going out, your business doesn’t have a secure future.
So it is critical to manage your cash flow well.
Note: If you are a member of the self Employed Business Academy, we recommend doing the course ‘Managing Cashflow’ in the Learning Center.
I can appreciate why this is number 2 on the list. Having employees is an area that many business owners have never had training. It also adds a new level of complexity to your business as you need to manage the employees as well as meet a number of government regulations in relation to their remuneration, pension contributions, working conditions, and more.
However, you may well get to a stage where you just cannot do everything yourself and need to either take on employees or outsource.
It is also important to hire the right people.
Hiring the right person for the job is not simply a matter of picking the person with the best qualifications or experience. Rather, it is a matter of picking the person who will best fit into your workplace culture and who clearly has goals that are aligned with that of the team and the organization. Once again, it comes down to the why and to finding people who really want to work there – not only for the money.
This is easier said than done, especially for people who work for themselves!
A study published by the American Sociological Review, said that 70% of American workers struggle with this. And that is the general workforce.
This would definitely be true for self-employed business owners who find it very hard to switch off because of the weight on their shoulders dealing with all the responsibilities of owning and running a business where the buck stops with you.
Nothing can be more frustrating than having a great product or service and having to worry about finding customers.
The first thing you need to realize is that you need to have this in place before you ever go to launch.
The “Field of Dreams’ approach which says” build it and they will come”, may be great for a movie script. However, your business is not in Hollywood.
In today’s marketplace there are so many more ways to find customers than ever before. On the other hand customers have access to more of your competitors, so knowing exactly who your target customers are becomes the most important factor in finding customers.
Someone once said that too much of a good thing is bad for you.
It is vital that you have a spread of customers so that you are not overly reliant on just a few. We have written about this before in our blog titled: ‘Don’t Put All Your Eggs in One Basket’.
In that blog we reveal two real life situations where businesses have failed because they relied to much on just one or two customers who made the decision to not use them anymore.
Make sure your marketing efforts are focused on getting multiple customers.
A business needs to be able to generate a profit if it is going to be sustainable.
Profit is different to cash flow.
A profit is what is left of the revenue a business generates after it pays all expenses directly related to the generation of the revenue, such as producing a product, and other expenses related to the business activities.
We said earlier that cash flow is king. This is because you need cash coming in to meet the payments of the business. Such payments can include items that do not affect profit because they relate to the purchase of assets, or payment of loans, owner’s drawings and so on.
A business can survive for a period of time even though it is making a loss, as long as it has the cash flow to meet expenses.
Obviously, this is not sustainable long term, and a business has to become profitable to survive.
You can read more about managing both profitability and cash flow in the ‘Administration and Finance’ section of the Self Employed Business Manifesto.
The number 7 issue in what keeps business owners awake at night ‘operating costs’.
We are referring to costs incurred in conducting a business’s day-to-day activities, other than those costs directly related to production. So, we are referring to such things as rent, repairs, payroll, marketing and so on. (See more about Operating Expenses at https://www.investopedia.com/terms/o/operating_expense.asp)
Monitoring and managing your Operating Costs is important as they can quickly get out of control without proper attention.
Once again, I refer you to the ‘Administration and Finance’ section of the Manifesto, for information on how to manage these costs.
So we have just addressed the 7 most common issues that keep self-employed business owners awake at night. Are these issues relevant to you?
Whether these issues are what keep you awake, or it is something else, the fact is that people who are self-employed are all impacted by issues that do not apply to others who do not own their own business.
The Self Employed Business Academy has been established to provide help cure your insomnia. For example, there are courses on managing cash flow, getting more customers, work/life balance and more. Plus, there is a community where members can talk to each other and get feedback on particular issues you may be having.
Why not take a look? You can try the Academy for just $1. Just click here, and we will see you in the exclusive Members’ area.
“I started my own business in 1995. The Self Employed Business Academy gets it. Clear, concise, and actionable information. You may be in business for yourself, but with the self Employed Business Academy at your fingertips, you won't be by yourself"
Ed Carey, AMG, LLC