The 10 Biggest Problems for Small Business Owners
Small businesses face unique challenges. The following is a list of some of the biggest problems of small business owners.
-Cost of Health Insurance: Many small business owners left jobs providing group health insurance plans and must purchase individual policies for themselves, their family, and their employees. This large expense can make starting a business difficult. Providing Massachusetts insurance policies for employees is often necessary to be competitive in the hiring of outstanding employees.
-Federal Taxes: Taxing on business income is a major concern for small business owners. Varying structures of small businesses changes the allotted tax rate. There is also an existing relationship between taxes and deductions on health insurance benefit costs.
-Locating Qualified Employees: Small businesses are at a disadvantage when trying to hire qualified candidates. Prospects are increasingly approaching interviews as if the business must immediately provide benefits and high starting wages. Prospects have the reverse attitude “what can your business do for me.” Even more, other business competitors are trying to “steal” hard working employees from your business. This puts a huge amount of stress on small business owners.
-Government Regulations: Many times decisions are made by politicians who don’t understand the full impact of a new regulation. New government regulations (and existing ones) can make compliance a difficult task. Laws take the time and attention of small business away from profit goals. Unreasonable government regulations result in a loss of opportunity and direct resources.
-Inflation: especially in the 70s and 80s this de facto tax has had a huge impact on small business
-Other Taxes: There are other types of taxes small business owners must worry about. Many business owners see Social Security as a lost investment due to the uncertainty of it being available when they decide to retire. State and local taxes vary by location but tend to increase when extra capital to fund businesses is most needed.
-Worker’s Compensation: Just like a tax, MA worker’s compsensation costs increase when payroll increases. Worker’s Compensation is similar to insurance in that individual small business owners must pay higher rates than those buying for a large group (such as a corporation).
-Federal Paperwork: Government paperwork is confusing and time consuming to fill out. Small businesses have trouble allocating personell to fulfill these responsibilities. Many times accountants and other professionals are hired by small businesses to fill out government forms. All of this detracts from the profitability of the business.
-Energy Costs: Have you ever sat in an office without air conditioning? Small business owners are always trying to find ways to cut energy costs. Even more relevant are high gas prices. Signficant energy expense increases, including freight costs, have larger impacts on small businesses than the big guys.
-Marketing: Business owners are having trouble understanding how to market their business online. Company websites, social networking tools (Facebook, Twitter, LinkedIn), blogs, Google AdWords, Yelp reviews and others are continuing to have increasing impacts on the profitability of small businesses.
The challenges of small businesses continue to evolve and get more complicated. Small business owners continue to search for ways to simplify their business processes and be more efficient. Hopefully, new integrative methods such as CRM software and cloud computing will aid the ability for small business owners to increase their profit capacities.
For more information visit the small business advocate.