Are you a small business owner? Are you hoping to reach all your goals in 2018? Do you have some concerns that your approach to your company finances is not all that it could be?
Like many small business owners, you’ll come to realize that financial problems always have a way of coming to light. One day you’re learning more about crypto tokens and the next you’re tackling challenges associated with credit repair.
Here’s the good thing: there is no financial problem so big that you won’t be able to find a solution. As long as you keep an open mind, there’s nothing stopping you from getting on the right track.
In many cases, knowledge is power. With this in mind, let’s examine a few small business financial problems that you want to avoid in 2018:
- Biting Off More Than You Can Chew
This is exactly what it sounds like: you make a financial decision that could put you in a bad spot in the future.
An example of this is taking on a business loan that you may not be able to pay back.
According to Value Penguin, the average small business loan amount by large national banks is $593,000.
If you take on this type of debt, you better have enough income to pay it back.
- Relying Heavily on Credit Cards
There is no denying the fact that using a business credit card is a great way to make purchases, remain organized, and maybe even earn something in return for the money you spend.
However, if you rely too heavily on credit cards, the debt could begin to weigh you down at some point.
As noted by CreditCards.com, individuals with credit cards are carrying an average of $5,300.
If this has become a problem in your personal life, you don’t want to go down this path with your business.
- Overspending on the Hiring Process
It goes without saying that you need to hire top notch talent to reach your goals. It also goes without saying that you could easily bring too many employees into your company, thus costing you a lot of money.
You should fight the urge to expand too quickly, as the cost of hiring an employee is higher than you may think.
In addition to advertising the position and interviewing, you also need to spend money on onboarding and training.
Tip: While you don’t want to overspend on hiring, you should do whatever it takes to keep your current employees happy. According to Zane Benefits, it costs roughly $3,300 to replace an entry level employee. You don’t want to find yourself doing this time and time again.
- Neglecting to Save
According to CNBC, half of Americans have no money saved for retirement.
While this may be a problem from a personal perspective, you don’t want it to bog down your business.
You should do your best to build your company’s savings account, as you never know when you’ll need this money in the future.
- Overpaying Employees
You want to keep your employees happy, as this can go a long way in ensuring that they do a good job for the company. However, you can’t get into the habit of overpaying, as this can kill your profits.
KL Gates shares some great advice on the steps to take if you’re paying employees too much.
Tip: If you’ve overpaid employees in the past, vow to avoid this for all new hires in 2018. You’ll soon find that it’s not nearly as difficult as you thought.
These are just a handful of the small business financial problems you could face in the new year. If you want to avoid these, you need to implement a strategy for doing so.
Tip: Don’t hesitate to take inspiration from those who have achieved success before you. With this approach, you’ll find it easier to avoid common problems that could slow your growth.
Do you have any experience overcoming these five financial problems? Have you dealt with any others in the not so distant past? Are you expecting more of the same in the future (despite your best efforts)? Use the comment section below to share your thoughts on how to best overcome these small business financial challenges. The advice that you share can help other business owners avoid the same problems over the next 12 months.