Do you know what is the most critical component of a small business? Finance! It keeps them informed that every business decision they make is crucial for survival. Although, small businesses have to face multiple obstacles in the market and managing finance is one of the most complicated ones. Understanding how to overcome these challenges not only reduce the stress but also help to evaluate business opportunities more precisely for your business. This post will walk you through the top 3 small business challenges that can turn your business finance into a nightmare. The post also incorporates the solutions to overcome them just like Business accounting assignment writing help services are used by students to overcome writing problems.
Top Financial Challenges Small Business Face in the Market
Recently, the Clutch has run a business survey on more than 302 small businesses to find out about the most common financial challenges they face in the market. What they got was actually surprised us all. To make the data comprehensive, they have divided it into three pain points given below:
- There are unforeseen expenses
- Mixing personal and business finances
- Not receiving the payment on time
Let’s dig further to know more about these challenges.
Unforeseen Expenses can Throw your Budget off Track
Around 35% of the clutch respondents find unforeseen expenses as their biggest marketing challenge. As the small business has to spend on unforeseen expenses like licenses, permits, unanticipated tax liabilities and stock/inventory that is stolen, lost or caught fire which is the pain point they face.
The unexpected expenses can take multiple forms such as professional fees, insurance cost, credit card fees, interest on the loan, cost of maintaining a machine and more. In addition, there are businesses who are uncertain of how these small and unplanned expenses affect their profit margin.
Solution: Unforeseen expenses are an essential part of the small businesses which cannot be avoided at any cost. Yet there are ways that can reduce its impact, including, budget planning, advanced policy planning that will cut the insurance surprises and other services.
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The Temptation to Mix Personal and Business Finance
Do you know more than one-quarter of the small businesses don’t have the separate bank account for business transactions? Perhaps it is no surprise that 23% of the businesses see mixing personal and business finance as a challenge for their businesses. Their concern actually has a strong base; combining personal and business finance is a risky task that can raise red flags for anyone who is auditing company’s finance, including, investors, auditors, business partners or potential purchasers.
Solution: Combining the personal and personal may seem tempting and convenient but it certainly carries a big risk that can do the damage to the entire business structure. Opening and managing separate bank accounts will allow you to have an easy tab on the transactions.
Last Payments can Affect the Cash Flow in the Business
Nobody wants to work for a client who pays late still, the late payment is not unusual for small businesses. In the survey, more than 21% of small business owners reported that late payment is one of the main financial challenges they face in the market. It can be a huge problem for small size business as delayed payment can affect the cash flow and as an owner, they have their own creditors to pay who are not so easy when it comes to due payment.
Solution: Late payment no doubt an annoyance for the small businesses but the latest tools like electronic devices can shorten the time and businesses can get paid for their work.
It is never too easy to run a small business in the market. To achieve success, you need to become a multitasker and learn how to overcome the marketing challenges just like academic students do with BookMyEssay. College students can avail online academic assignment writing service in Muscat at the reliable cost.