Small businesses face an uphill climb when it comes to finding and retaining top performing talent. Experienced and talented workers often tend to aim for jobs with high rates of pay, excellent employee benefits, and job security with a clear path for advancement. Unfortunately, all of these are difficult for startups and small businesses to provide, particularly compared to what larger competitors can offer.
When she joined Ventas in 1999, Debra Cafaro found herself at the head of a business on the verge of financial collapse. Just 10 years later, the company was named the most successful publicly traded company in the first decade of the new millennium. In the past 19 years, she oversaw and implemented a strategy that brought the company’s market capitalisation from $200 million to over $24 billion.
Most small business owners launch their businesses using a fixed amount of capital, often their personal savings or a business loan. To give themselves as much time as possible to establish their business and become profitable, entrepreneurs tend to work with very tight budgets, keeping costs trimmed down as much as possible. Unfortunately, for many businesses, that means keeping wages low, and often hiring entry-level employees that aren’t fully qualified in hopes of saving money. Often, this turns out to be a mistake.
Though many small businesses rely on equity investment for their startup funding, most entrepreneurs still use their personal savings, private loans from friends, and financing resources to launch their business. This leaves them with a small, fixed amount of capital with which to establish themselves. As a result, most small businesses operate on very tight budgets that leave little room for extraneous spending, and that leaves businesses vulnerable to cash flow issues.
Business owners don’t start companies with the hope of just getting by. Rather, entrepreneurs pour their time and resources into their business because they’re passionate about what they’re doing, and they want to realise a greater vision. That means not just establishing their business, but growing, innovating, and taking a leading position in their industry. Doing so successfully, however, is tricky, and requires a lot of preparation.
Time is the most precious, and most limited, resource that small business owners have. There are never enough hours in the day to tackle all the responsibilities an entrepreneur needs to stay on top of. Early on in a business’ life, businesses don’t have dedicated teams to deal with payroll, sales, marketing, legal issues, production, or management. Instead, business owners find themselves trying to do all these jobs to varying extents.
Maintaining steady cash flow is one of the toughest jobs that small business owners face. Since most small businesses operate on very tight budgets, they normally can’t afford to deal with unwelcome financial surprises. Unfortunately late payments, equipment breakdowns, unexpected fees and taxes, and any number of other cash flow issues are a natural part of doing business.
Frequently we credit the entrepreneurs that founded successful startups with most or all of the success that those businesses enjoy. While that’s fair in some cases, this simplistic attitude often leaves us ignorant of the most important business people of our time. The perfect example of this is Sheryl Sandberg, who is arguably responsible for the staggering success of Facebook in the past decade.
Making a new startup successful is an enormously complex job that requires entrepreneurs to master a wide variety of skills, and do multiple jobs at once. At the end of the day, however, business is about money, and ensuring that there is enough of it at any given moment to keep the lights on. For many business owners in their first several years, building business relationships, chasing down payments, finding investors, and getting access to financing to keep their companies afloat is their most important job.
Data security is a big issue for small businesses and all over the world. Attacks on businesses result in the loss of millions of business’ and private individuals’ personal data, making them vulnerable to identity theft. However, this isn’t the only threat that small businesses are forced to deal with when their sensitive data is compromised. Some fraudsters won’t go to the trouble of using the data to hack into accounts and steal money, and instead will pressure businesses into simply paying them.