According to the most recent study by the National Federation of Independent Businesses (NFIB), small business owners identified taxes, government regulations and requirements, quality of labor, and poor sales as the top four problems they face today. We take a look at each below and give you some tips to help your small business deal with each of the problems effectively.
Problem 1: Death and Taxes – The Only Sure Things In Life
21% of businesses owners surveyed by the NFIB identified taxes as the primary problem faced by their small business, making taxes the number one problem identified by small business owners. You are going to pay business taxes and they are a hassle, which is a fact that is not going to change anytime soon. But, there are a variety of things that you can do to significantly decrease the stress, time commitment, and disorganization that often defines small business taxes. Here are our recommendations:
1) Start Using Accounting Software
If you are still using spreadsheets or notebooks to keep track of your business finances, it is time to upgrade your accounting practices. With today’s accounting programs, you can track expenses, auto-import transactions from your bank account into specific categories, create detailed expense reports, manage payroll, calculate taxes, and much more.
There are solid options for all price ranges. Quickbooks Online is the most popular, and a good choice if you’re working with an outside accountant. If you’re looking for the best Quickbooks alternative, we recommend Xero, which offers additional conveniences at a lower price.
2) Take Advantage of Apps that Simplify Your Business Expense Management
We already talked a bit above about accounting software, but there are also some other great apps out there that can help you manage specific areas of your finances. For example, there is Expensify, which allows you to keep track of billable time for specific contracts, immediately upload receipts and assign them to different expense accounts, track mileage, bill clients, and more. Anything that can help you manage your reporting and expense tracking will help you expedite the tax process.
3) Don’t Be Afraid to Get Professional Help
Many small business owners just decide to do their own taxes by default, to try to save money. Being a small business owner myself, I get the motivation. However, oftentimes, you can actually save money in the long run by getting professional help. There are several reasons for this:
- Professionals Often Know How to Work The System to Get You More money – Although not always the case, professionals can often get you a higher refund than you would get doing your taxes yourself.
- You Have More Time to Do What You Do Best: Run Your Business – For more complicated small businesses, doing taxes yourself can take several days and to a week to get everything sorted. That’s time you could be spending running your business instead.
If you put all of these pieces into place, it will be a much smoother process when tax season rolls around. You will have your information organized and accessible, which will be immensely helpful regardless of whether it is you or your accountant doing the actual tax prep work. If you don’t know an accountant in your area, you can give 1-800-Accountant a call.
Problem 2: Red Tape: Gotta Love the Government
20% of small business owners in the NFIB study labeled Government Requirements and Red Tape as the biggest issue facing their small business. This has been even more evident recently, with Obamacare’s changes to employer healthcare provision requirements and looming changes in the overtime law payment requirements for salaried employees. Here are some tips to help you navigate the red tape:
1) Do Your Research and Keep Track of Changes Coming Your Way
Although it would be nice if there were some super-convenient way to keep track of new legislation that affected your business, that is not the case. The reality is it just takes research and time to make sure you are keeping on the right side of the government regs. Here are some resources to follow, which will at least give you a heads up of what is in the small business legislation pipeline.
- The House Small Business Committee Legislation Page – Although a bit technical, it has a list of all legislation that has been referred to the small business committee for review.
- The US Small Business Administration’s Business Law and Regulations Page – Small business rules and regulations broken down by industry, employment, etc.
- The National Federation of Independent Businesses Site – Has lots of info on recent and upcoming legal changes for small businesses
2) If Necessary, Use an Attorney: Especially If You are In a Highly Regulated Industry
Certain industries have a lot of detailed industry specific regulations. There may come a time when having a specialized industry attorney that you can tap for info might be the best option, especially if you are in a highly regulated industry, such as chemical/mechanical processing, energy, healthcare, stocks/financial consulting, etc. The best way to find a good attorney, is to get in-touch with similar businesses or a lawyer you trust and get their recommendations for local small business attorneys that have experience in your industry. You can also check out Avvo.com, a legal help review site with reviews and local attorney listings. Don’t be afraid to get legal help, as it may save you thousands or more in lawsuits and fines down the road.
3) Use Third-Party Resources and Services
With many regulations, you are kind of on your own when it comes to sorting out how things work. But, with others, specifically regulations related to employees, there are software and service companies out there that can help. There are a number of new companies focused on making payroll and benefits easier for small businesses. We recommend Gusto, which offers an excellent tool for managing payroll and recently branched into handling benefits as well. You can learn more in our complete guide to setting up employee benefits.
Problem 3: It’s Hard to Find Good Help These Days
The third most important problem identified by small business owners, was quality of labor, with 14% identifying it as the biggest problem facing their business in the NFIB study. Sometimes it’s just hard to find good help. That might mean difficulty finding a new hire to fit a position, underperforming employees, or both. Here are some tips to help you find the right help for your business:
1) Invest a Significant Amount of Time in the Hiring Process
If you hire a full-time employee and they work for you one year, that is something like 2000 hours. Even if it takes you a whole week (40 hours) to hire one good person, that is a pretty good return on your time investment if they excel.
Fit Small Business’s hiring process is as follows:
- Application phase with resume and survey
- Individual Video Interviews with the top candidates
- Second interview with promising candidates
- Test project
It is very involved process, but by-in-large has produced quality employees for us that are taking our business to the next level.
2) Diversify Your Job Listings
Do not just post your job listing on one site. Diversify to increase your candidate pool and give yourself a better shot at finding true talent. To reach the broadest audience, consider posting on Indeed, which is the largest online job board by far. LinkedIn, Craigslist, and Monster.com are all options as well, depending on the position. You should also look for relevant niche job boards, such as Dice.com for IT talent or AllRetailJobs for retail positions. Click here for our full guide to the leading job boards.
3) If Necessary, Let Current Employees Go
Sometimes an employee just doesn’t work out. Of course, there are the obvious cases of workplace negligence and laziness. But it’s far more difficult when you have a hard-working employee that just is not producing for you. Sometimes it is best for both of you to part ways. If this is your situation, check out our article on how best to fire an employee.
4) Don’t Settle for Good When You can Find Great
Good employees are hard enough to find that business owners often jump on one when they find it. The problem is, someone might be a good employee but not a great fit for your business. Don’t settle for good when you can find great. It is the great employees, those that really buy into your business, that will take you to the next level.
We recommend Indeed to small businesses looking to hire. Click here for more tips on how to write the perfect job posting.
Problem 4: Sales? What Sales?
I call this the fourth most important problem, but really, it was tied exactly with quality of labor at 14% in the NFIB study. Business owners have a good reason to identify poor sales as a major problem. Sales drive growth, and without them owners start to worry and business can eventually go under. So, what can you do to jumpstart your business’ sales? Here are several tips:
1) Follow Up With Leads Within an Hour
Sometimes, increasing sales is as simple as being more disciplined with lead follow-up. According to a study by the Harvard Business Review, companies that contacted leads within an hour or less of the initial capture were seven times more likely than competitors to have significant conversation with someone in the business who actually has influence over financial decision making. In other words, decrease lead follow-up time and increase sales.
2) Take Advantage of Project and Lead Management Software
Other common problems with small businesses, are leads falling through the cracks and repeat calls to the same lead about the same thing. This communicates that your business is unprofessional and disorganized, neither of which are traits that are known to fuel sales. So how do you become more organized? CRM software is one popular option. We use Insightly to track leads for our sister site, Fit Biz Loans, though there are plenty of options out there, including Zoho, which resembles Salesforce but comes with a much lower price tag. You can see our full CRM recommendations here.
3. Pamper Your Current Customers
Sometimes, in the effort to push new sales efforts, current customers get neglected, which can be a huge issue. According to emarketer.com, referral leads have over 2x the conversion rate of any other kind of leads and nearly 4x the conversion rate over paid search and marketing/advertising. In other words, if your current customers are unhappy, that might help explain why you are having a hard time fueling new sales growth. If you pamper your current customers and treat your employees right, they both will be much more likely to refer friends, family, and acquaintances to your business, which will start a sales and referral growth snowball.
One way to do this is to get a good helpdesk system, which will help you manage customers and take your customer support to the next level. We recommend Freshdesk because it’s affordable, easy-to-use, and comes with all the features you need to get your online help desk up and running. You can check out our full help desk software recommendations here.
The Final Word on Dealing with Small Business Problems
When your small business is facing serious challenges, they always seem bigger than life. But, in most cases, there are concrete action steps you can take to face the problem head on and deal with it effectively. That’s what this article is all about: giving you some practical ways to deal with everyday issues you are facing in your business.