Any business owner operating a small business, knows how time consuming, difficult and stressful it can be to grow in changing times.
With 2018 set to be another challenging year for small businesses, managing volatility and facing challenges will be a skill all business leaders need to nurture. The comforting aspect is you’re not alone. Other business owners are experiencing the same issues as you. When you understand the challenges, you can take action by setting up the systems and processes, or seek help from the right professionals, to solve these problems before they even happen.
Our long term experience working with small businesses has helped to identify the most common and time consuming challenges that are, or have been, bothering our clients recently. Clearly, there are numerous challenges lurking in small businesses but we’ve boiled them down to the top 6.
There are many issues facing business owners such as Brexit, access to finance, changes to pensions and many more, but remember the date May 25th 2018. This is the day when the European General Data Protection Regulation (GDPR) comes into force. This legislation will replace the current Data Protection Act.
What does GDPR mean for your business?
All businesses, big or small have to comply with the new regulations regarding the secure collection, processing, storage and usage of personal information. The objective is to improve rights and protect personal data.
With no transition period leeway and large fines for non-compliance, this is not the time to put your head in the sand. Despite Brexit looming, UK companies still need to comply with this new regulation with confirmation that the UK will mirror the GDPR post Brexit.
Read ICO definition of personal data means here.
6 principles of GDPR
The company data controller is responsible for, and needs to be able to demonstrate, compliance with all these principles:
Personal data should be:
- Processed lawfully, fairly and in a transparent manner
- Collected for specified explicit and legitimate purposes
- Adequate, relevant, and limited to what’s necessary in relation to the purpose
- Accurate and where necessary, kept up to date
- Kept no longer than necessary
- Processed ensuring appropriate security
Choose which of these lawful bases for processing personal data is most appropriate to use depending on your purpose and relationship with the individual. You will need to justify the reasoning so ensure you record this in a policy document.
Where do I start with GDPR?
The ICO has produced some very useful and clear guidelines and documents on their website explaining GDPR in greater depth. Reviewing the information from the official source will help weed out the conflicting information from various companies on the subject.
Start with the below documents:
12 steps to prepare for GDPR
Guide to GDPR
CMC Partners are business advisers not GDPR experts, we simply wish to raise awareness of this looming regulation to business owners. We encourage you to seek guidance from ICO and/or legal advice, if required.
2. Cash Flow
For small businesses cash is the lifeblood to keep daily operations running. Too many business owners struggle to manage it effectively or recognise the importance.
‘92% of business owners surveyed experienced problems from time to time or consistently.’ CMC Partners Survey 2016
It is normal to have cash flow inconsistencies but being in control is essential not only for the health of your business but to free up some of your time to focus your attention on managing and growing your business.
Tips for Cash flow Management
To minimise the impact of peaks and troughs, download our Cash Flow Whitepaper here.
3. Underperforming Staff
Most businesses at some point in their business journey experience issues with an under performing employee. Informing a member of staff that they are under performing can be a daunting prospect. You may be one of the many owners who dislikes and even avoids this conflict but unresolved it can be poisonous for your business.
We are working with various owners currently to identify and resolve these type of people issues within their business.
To start, you need to ask yourself some key questions:
- Have you made your expectations clear?
- Has the employee had sufficient training?
- Is the workload too high?
- Did you hire the wrong person for the job?
- Are their personal issues affecting the employee?
- Is the communication effective between the person and the team or manager?
- Have you considered motivating factors ?
- Is there another role which the person would be better suited to?
Once you have considered the above, a plan of action for improvement can be implemented.
Failing the above then you will need to follow the disciplinary process. Meanwhile the employee may well come to the conclusion that it’s not working out for them and hand in their notice.
Determining what resources are required in terms of people and skills is key to growing any business. In our experience of working with business owners, most encounter problems when it comes to hiring the right people. To help guide you through this process, download our Growing your Business – The People Dimension
4. Too hands on
A remarkably common issue amongst business owners is being too ‘hands on’ with running everyday operations. Owners are having to focus on the day to day running of the business to such an extent that thinking about managing and growing their business is neglected.
This approach leads to the owner neglecting the overall strategy and their personal objectives, causing detrimental effects.
What can you do about it?
Stand back, review the situation and focus on managing and growing your business. Hire, delegate, lead and motivate your team. This will free up your time to focus on the key aspects to successful growing your business. Read more here
5. The Right Systems
All businesses produce and rely on large volumes of information – financials, customer data and interactions, employee details, regulatory requirements and so on. To be efficient and effective, the right systems are crucial to business growth.
Responsibilities and tasks can be delegated as your business grows. However this does require solid management information systems to manage effectively. The larger your business grows, the harder it is to share information and work together effectively. Putting the right infrastructure in place is an essential part of growing.
Documentation, policies and procedures also become increasingly important as more employees join your business. Gone are the days of surviving on spreadsheets or filing on your desktop as customers and employee grow in numbers. You need proper contracts, clear T&Cs and effective employment procedures.
Investing in the right systems early on will certainly pay off both short and long term through efficiency.
6. Overvaluing your Business
As a business owner, exiting or selling your business is personal since you have worked so hard over the years to nurture and build it. This emotional attachment often leads to owners overlooking flaws and overvaluing their business. Of course, there is no harm of thinking well of your business, unless you wish to improve its profitability or plan to sell it.
Taking a step back to view your business as a potential buyer would see it will help you succeed in building real value in your business.
Developing a personalised and achievable exit strategy will help shape your business and maximimise the value over the years, allowing you to exit at a time of your choosing.
CMC Partners specialise in Exit Strategy development and selling businesses. We help owners realise the full potential of their business whilst maximising its sale value. If you would like an initial conversation or realistic valuation with advice on how to improve it, contact us.
These challenges amongst others are experienced by all business owners including your competitors regardless of the industry. How you respond to these challenges and whether you are in to control of them will determine your success.
Face these challenges, tackle them, resolve them and move on to focusing your time on running your business profitably.
Since 1989, CMC have been guiding business owners to achieve their goals whether sustainable growth, increasing business value, planning your exit strategy, succession or selling your business. As business owners ourselves with vast business experience, we listen to, and support owners through the twists and turns of running a business. We give a range of practical advice, perspectives and direction to help you take control, make informed decisions and overcome challenges. If you would like help with the above challenges or other business problems, arrange your FREE 2hr appointment here.