Biggest Challenges Small Business Owners Face


Steve Thompson

May 10, 2022


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Starting a business these days is easier in some ways yet more challenging in others compared with 20 years ago. The more your business adopts a digital infrastructure, the better prepared it will be to compete in the modern business landscape. Here are the biggest challenges small business owners face today.

Planning for Business Growth

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While the biggest challenge is operating profitably despite rising costs of labor and material, planning for business growth is part of this challenge. You need the ability to commit to a plan with a degree of flexibility to deal with trends and economic changes. As your business grows, you need a plan in place for easy, flexible, and affordable scalability. Developing long-term planning with backup plans is one of the keys to business continuity.

If you only work with a shortlist of clients, you're operating more as an independent contractor than as a business. Client diversity is a more sustainable goal than just serving one client. When you become dependent on a single client, it can create a major setback when something happens to the client and they can no longer pay you. At the same time, there's a great advantage to working with one or a few clients in the cases of long-term contracts or commitments.

Creating Paths to Lead Generation

Sales are built on leads, which can come from your personal network, friends of friends, and marketing. The key to developing a consistent stream of leads begins with building an email list. Using a customer relationship management (CRM) software platform, you can develop email campaigns, such as sending newsletters to subscribers on a regular basis. Email marketing is still the top way to connect with a target market, other than word-of-mouth referrals or face-to-face communication.

The best way to attract leads is through online channels such as your website and social media pages. As you interact with interested individuals online, part of your goal should be to add them to your email list. Another step you can take is to optimize your web content with SEO techniques so that it gains search engine visibility.

Establishing Sound Money Management

Another one of the top challenges facing startups is proper money management. The way a management team runs a business has a direct impact on financial matters such as cash flow and net income. It's advantageous to either hire an accountant or work with a financial consultant to oversee finances so you can focus on ideas for developing your enterprise.

Prioritizing Quality Control

Magnifier with the word "Quality Control"

Quality and growth go hand in hand, so quality control needs to be a top priority. If quality is compromised, your brand loses a competitive edge and might get bad reviews that create market buyer hesitancy in your product or service. Aiming for quality as part of your brand image helps create a loyal following.

Mastering Customer Service

One of the biggest small business problems is clear communication between company representatives and customers. Business owners need to hire individuals who articulate clearly since their job involves dealing with customers directly. Ignoring the quality of communication may create barriers to selling. Part of achieving customer satisfaction is hiring the right customer service talent. Remember it's easier on your budget to maintain a consistent staff that evolves with your company than to constantly hire and train new talent.

Developing an Online Presence

Your business plan should include how you will develop an online presence with a website, social media profiles, and other multimedia channels. A major small business challenge is to develop a professional appearance online. There are various ways to build free to low-cost websites, but a cheap-looking website is not going to attract and retain as many followers as a more advanced-looking site. Furthermore, it's imperative to make your site mobile-friendly, since the most ready-to-buy customers make purchases with their smartphones.

Building Brand Awareness

Clips with the word "BRAND"

Without brand awareness, a brand will have a limited following. It usually takes marketing, advertising, and engagement with a target audience to start seeing responses to a particular brand. The main goal of branding is to associate the brand with ideas and feelings that relate to its target market. Part of building a strong brand involves maintaining a consistent staff that builds relationships with clients.

Operating with Limited Resources

As any small business owner knows, market competition usually favors well-funded players that can afford to invest in the means of production to deliver both quality and quantity. Without high-quality equipment and labor, it's difficult to compete in a commercial arena. A company with a small capital base may struggle for a while to get off the ground, whereas larger firms can get more done faster with more resources. Only about 13 percent of small businesses are approved for business loans.

One way to avoid an expensive staff is to outsource to specialists, particularly for web design, app development, and digital marketing. You won't have to worry as much about managing workflow. Even with limited resources, it's possible to generate leads through SEO, online advertising, and social media. By adding marketing automation to your resources, you can increase your odds of generating low-cost leads.

Establish a Work-Life Balance

Balance with work and life on each side

Entrepreneurs often overwork themselves in the pursuit of success. The problem is that too much focus on work can lead to stress, which impacts health. Excess stress is a common cause of high blood pressure, heart problems, anxiety, and insomnia. Health is further impacted by lack of exercise and improper diet. All of these factors can add up to depression and burnout for owners, managers, and workers.

The key to avoiding health problems that arise from overworking is to establish a work-life balance that separates business from your personal life. Freelancers have more flexibility in setting their work and pleasure schedules. If your startup has employees, you need to promote a work-life balance for the entire team.

It's imperative to guard against fatigue, which can reduce productivity. An effective solution is to designate a break room where you and other team members can relax. Check out these break room ideas for employees. Allowing for a degree of fun activity makes workers feel better about their jobs.


Be aware of these biggest challenges small business owners face. Entrepreneurs who ignore confronting these challenges often come up empty and are forced to rethink everything. The more you plan ahead and work with quality partners, the clearer your path forward will be. To find out more ways to overcome challenges and help your business grow, be sure to subscribe to our small business newsletter.

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