A study conducted by the National Federation of Independent Business (NFIB) asks the question, "What is the biggest problem facing small business owners?"
This is not a question that is easily answered without some thought. Different businesses have different problems, and place higher priority on some of these problems than others.
The general consensus, however suggests that business costs are the biggest problem. In particular, health insurance and energy costs.
"For four years, the economy provided a good, stable foundation for small business owners to do business, but as it started to take a negative turn over the last several months, they felt the effects of rising costs of doing business as reflected by these results," said Bruce D. Phillips, Senior Fellow at the NFIB Research Foundation. "As the economic outcome remains uncertain, small business owners are searching for innovative ways to reduce expenses and increase sales."
The study polled respondents on 75 different possible business problems, and had them rate each one on a scale of one to seven in terms of severity. Half of the top ten problems were cost related.
If business costs are indeed one of your biggest concerns, you're probably always on the lookout for ways to save your pennies. Our video Anchor Abby Prince has a video up with a few tips that could help.
I'd also like to add that managing your time (and your employees' time better can be a huge money saver as well as saving your customers money in order to get to spend more with you.
Do you even consider business costs the biggest problem you face? If not, what do you consider it to be?
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Profits
I agree, management is key. Manage variable expenses, employee production, and manager time and activities. All personel who come in contact with customers should sell and satisfy. Its easier to sell to an existing customer than to aquire a new one. Plan for customer retention just like you plan your day. Do something specific that will encourage the customer to stay with you, even it's just a contact to say thank you.
Every expense should be profit driven where possible. Cut costs by negotiating better prices with suppliers.
Get help, there are programs set aside for small business owners who are committed to profit driven, job-creating improvements.. If you're not committted you will not turn things around and who wants to help someone that does not want to help themselves anyway. Make the decision..its your call.
RE: Profits
First Things First
I attended a Marketing Workshop last night and the first question posed to us (the audience) was, "Who here has a written Marketing Plan?" Only three people in the room (including myself) raised their hands. This didn't suprise me, however I can't say that I understand the logic of the other people in the room...if you don't have a plan, then you don't have goals.
Reading your article, and after attending this workshop, it seems clear to me that it may not be rising costs that are the problem here...you don't necessarily have to pinch pennies and give up your morning latte. The most basic thing that many small business avoid/forget/ignore/don't do is to write up a plan. KNOW your costs in advance, KNOW how much money you need to make each month/week/day to survive...without these basics you can't possibly know what your appropriate price point is, how many hours you need to put in each day, or where/how to cut back on costs if necessary.
PLAN. That's the bottom line. Get friendly with Excel, learn to like budgeting, track your sales, know how to do what you do during good times and bad.
It's just like confronting any other emotional issue (money is definately an emotional issue for people)...acknowledge that you've been avoiding it, confront it, deal with it. Once you've tackled it head on it's not nearly as scary anymore.
RE: First things first
Thank you for sharing. Sounds like a good workshop and having a plan is certainly good advice. The more detailed the better, but even just gathering basic ideas and putting them on paper (or in computer) is a step in the right direction. Like you said, Excel can be a great friend.
I agree that health
I agree that health insurance is a major issue. I am excited about Obama's plan to provide a tax incentive to cover part of the cost of health insurance for my employees. Sounds great to me.
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