3 Risks that Keep Small Business Owners Up at Night
It’s not easy to run a small business. Business owners face a diverse range of risks-some business-related, but also personal jeopardies such as debt and income loss if things go really wrong. This is understandably stressful as it can leave an air of uncertainty over the future. Technology can also be confusing and might leave a business owner with plenty of questions, such as, what is edge computing? Or which software should I be using for my business? Understandably this can be a difficult field to navigate for any business owner who is not tech savy. Some entrepreneurs might potentially turn to a company similar to Syte Consulting Group or their own trusted advisor to potentially help with managing and planning enterprise resources, to hopefully lessen any future issues.
So what are the highest risks that commonly keep small business owners up at night? An article from Forbes provides some insight; it includes the results from a NFIB (National Federation of Independent Business) “Small Business Problems and Priorities Survey” conducted in 2016.
The top three concerns of small business owners, as derived from this survey, were as follows:
- The cost of healthcare
- Oppressive government regulations
- Federal income tax on businesses
You might notice a theme here. Interestingly, according to this study, nine of the top ten small business challenges are associated with government.
What’s the outlier that’s not government related, you ask? Finding qualified employees.
The cost of hiring new employees
Deciding who to hire is an important process for small business owners, but finding the right people is no easy feat. This is where making bad decisions comes into play. However, nowadays small businesses can make wise decisions in the employment process by taking the advantage of employee background check companies (you can take a look at these guys for more information) and hiring the right talent for their company. Background checks can help small businesses from the probability of hiring an unfit person.
According to a “Small Business, Big Hire” survey conducted in 2016 by Monster Worldwide, “nine-in-ten small business owners (89 percent) identify hiring the wrong person for a job as a risk to the company, with half (51 percent) saying it is a major risk.” Many issues can arise when an employee is not fit for a particular job, including product use errors or customer service mishaps, all leading to a negative impact on company productivity and reputation.
To make matters worse, when you hire the wrong person, you waste the organization’s time and money. One-third or more of these owners estimate wasting over 50 hours of their time and over $1,000 due to their most recent wrong hire. This can eventually lead to providing bad services to clients and in the process losing them.
Often times, wrong hires are really an extension of overlooking historical data points from employee lifecycle, training and on-boarding. Typically, these indicators have served a way forward for employee retention. But when these data-points are retroactively applied to hiring strategies, they can yield the desired outcome. As for collecting said data-points, this can be achieved through customized surveys offered by third-parties (have a peek here for better understanding). That is not to say that existing mechanisms such as assessments, interviews etc don’t matter, rather the infusion of data (both historical and new) can certainly reduce the chances of getting bad hires.
The takeaway? You do have some power over who you choose to work with, which has a larger impact on how the business runs than some might think.
And even if you feel powerless against government regulations, there are a variety of support networks specifically designed for small business owners. Here’s a few of them that you should check out:
U.S. Small Business Administration (SBA)
National Association of Women Business Owners (NAWBO)
National Small Business Association (NSBA)
At Cleary, we believe life is worth the risk. If you’d like to chat with someone about how to better manage your small business, email us here.