Small businesses are a very important part of the American economy.
According to the SBA, more than half of Americans either own or work for a small business, and they create about two out of every three new jobs in the U.S. each year.
Next week kicks off National Small Business Week, so we asked our resident thought leaders, the Market Experts, what they thought was the biggest issue affecting small business today and why. Read their answers below, and tune in next week for in-depth, how-to knowledge for small business owners and decision makers.
Related Article: Ask the Market Experts: How Do You Stay Productive and Mindful?
Lyndi Catania: One of the biggest obstacles affecting small business today is the amount of workers compared to the amount of time. This is an obstacle because many small business owners don't have the budget to hire more employees. They are then forced to work more hours than it's healthy to, negatively impacting the quality of the work. Unlike large corporations, a small business might not have enough people to delegate every task.
Tyler Thursby: I personally believe the biggest barrier to success for any small business rests with how well employees are setup for personal success. It’s not just a matter of hiring the right people — leadership must provide all of their team members the opportunity and resources to make meaningful contributions in order to realize success.
Buckley Barlow: The biggest obstacle affecting the growth potential for small business today is the ability to recruit top tier talent. Although it's hard to think that finding staff is still a problem in an economy where so many people are looking for full time employment or a better job, the irony is that when a worker has the skills needed to fill the position, a small business oftentimes cannot compete on salary and benefits with larger organizations or well funded venture-backed startups. So what gives? The best way to tackle this obstacle is to recruit those who are passionate about the business and then have each new recruit go through an ongoing employee development and skills training program. Keeping employees vested and skilled is a simple yet powerful formula for growth.
Biron Clark: I think marketing is the biggest challenge small businesses face in 2016. Getting the word out about your business is crucial to its success. Technology has made it easier than ever to test and bring a product to market, but it is difficult to cut through the noise on social media and other marketing channels and differentiate your business and brand.
Phil Butler: The biggest hurdles small businesses face today are not technological, nor even budgetary in nature. Technology has advanced to the point where economies of scale are minimized. Small business people are curtailed far more by the myriad web of marketing speak and information overload, than by any logical impediment to business. The straight PR storytelling method has in many cases been supplanted by sales and marketing "conversion" talk, which really muddies the water for businesses needing to adopt new services and platform.
Deborah Sweeney: Forging meaningful relationships within the community remains a real issue. Small business owners are fiercely independent, as we feel like we have to solve all of our own problems. When I first bought MyCorp, I remember thinking the problems I had were somehow unique when, in reality, everyone goes through the same growing pains. Luckily my husband had run his own business and I had no trouble approaching him for help with downsizing or profit projection, but not everyone has that sort of relationship with other business owners.
Thankfully networking events – both online and in real life – are becoming more and more common, and people are discovering ways to connect with possible mentors and friends. Still, I talk to business owners every day who admit how difficult it is for them to ask someone else for help. No person is an island, and business owners love to talk about themselves, so I always tell small business owners to just reach out and ask someone who has been in the trenches to coffee so you can run your ideas or problems by them. Just talking through possible solutions really does make all the difference in the world.
Vivek Patel: Creating valuable content is no mean task, but if you know what clicks with your niche industry and are worldly-wise enough to put your money in the right place, you should have no trouble in coming up with effective content even on a small budget. Other investments that go into developing high-quality content include writing skills and lots of time, both of which aren’t easy to come by.
Once you’ve got your content marketing strategy in place, you will have to start figuring out as to which social media platforms you can use to promote your content. Succeeding at this may not require you to break the bank, but it will need your time. And lots of it. Your job will not end with posting content across various networks. After that, you will have to respond to readers’ queries and comments, and monitor industry influencers. Sounds complicated, doesn’t it? This is probably why a lot of small businesses prefer using other tried-and-tested marketing tactics such as sending out direct mails and hosting local events.
Julie Ellis: I think that one of the biggest obstacles affecting small business today is information overload.It gets difficult to find right and effective solutions. It becomes a challenge for a new business to come up with good decisions. However, one easy solution is to look for the authenticity of the data - check sources, writers. Start asking successful businessmen about their experiences. Learn from them.
Simon Dell: Personally I think the biggest challenge affecting any small business is cash flow. Every business, including mine, has suffered from, or suffers from issues with getting money in that is owed with them. The problem stems from a domino effect of one business having poor profitability earlier on in the chain that then starts to directly effect all the others, as many small businesses trade with other small business. Thus the situation compounds itself.
However there are a number of good solutions that can be implemented. The best two I have seen is invoice factoring - where another business loans you the value of the invoice that you've issued and pay you immediately. The second is to move your business, where possible, to a subscription business. If you can implement a direct bank transfer for services or goods at the start of the month, then that goes a long way to eliminating many cash flow issues.
Jared Proctor: The biggest obstacle facing small business is easy access to the "right" capital. Bank loans are extremely difficult to get (strict underwriting) and online "alternative" loans can be costly and nebulous. In a recent Federal Bank of New York small business survey, online lenders received a dismal satisfaction rating of 15 out of 100. Over 44 different types of financing options exists from hundreds of lenders. Small business owners are so busy managing their business, how are they supposed to researching what's right for them? That's why many wind up in the first, best-marketed option instead of the financing that's appropriate. Failing here sinks too many businesses. Fortunately, a few smart tech companies are starting to use big data and underwriting criteria to help point small business owners in the right direction, with minimal "lift" on the part of the business owner.
Eric Stites: I think it's our educational system. The No Child Left Behind / Elementary and Secondary Education Act of 2002, while good intentioned, has driven our educational system in the wrong direction. Far too much emphasis is being placed on test scores, and not on TRUE student outcomes... like employment rates, and business startup rates - both of which have fallen significantly among millennials.
We need an education revolution to focus more on creative problem solving, entrepreneurship, and career opportunities starting in elementary and middle school. Why do we require subjects like Algebra, Geometry, and Calculus of our high school students but we don't teach them basic skills in personal finance in many cases?
There is more and more pressure today to get an advanced degree, yet our college students are graduating with a huge amount of debt and few prospects of jobs that will provide a return on investment for their degree. Colleges have become very savvy marketers and they are ones pushing the myth that everyone needs an advanced degree. Meanwhile, competition over students has forced colleges to invest billions of dollars in fancy dorms, dinning halls, athletic facilities, and Disney-like campuses... all of which has caused college tuition to skyrocket, and none of which helps students be more career-ready.
If we want to jumpstart small business in America, we need to revolutionize our educational system. There's a reason why many of America's most successful business owners are high school and/or college drop-outs. If we stop "teaching to the test" and focus instead on building entrepreneurial and creative skills among our youth, we will experience an economic boom beyond anything we've ever seen!