What Is The Biggest Challenge Facing Small Businesses Right Now?
The unique challenges that come with starting and growing a business are a big part of what make the experience so rewarding. After all, is there any bigger rush than securing that first loan or finally landing that big customer? No two days are exactly alike, and that's part of what makes the journey fun.
But a schizophrenic stock market, grim economic reports and a bumbling Congress unable to conduct anything resembling a real debate have presented entrepreneurs with some big challenges lately -- challenges often out of their control. What happens on K Street and Wall Street inevitably has an impact on Main Street, perhaps now more than ever, and many entrepreneurs find themselves weathering a new storm just as they were starting to recover from the Great Recession.
Our Board of Directors hails from a variety of industries and locations across the country. So who better to ask about the state of small business today? It ain't pretty, but as usual, entrepreneurs always see some opportunity amid the chaos.
Rob AdamsDirector, Texas Venture Labs at the University of Texas
"General malaise. The 24-hour news cycle leaves everyone feeling on edge. This causes business owners to hunker down and customers to stop spending. U.S. debt ratings, U.K. riots, strange weather, political polarization, grainy video feeds from the Arab summer, crazy market swings, phone hackings, bankrupt countries -- it’s all a bit overwhelming. Time to turn off the TV and get back to work."
Tate ChalkFounder and CEO, Nfinity
"The biggest challenge right now is cash -- or, rather, the lack of cash. One of the largest lessons learned in the Great Recession is that nothing matters more than cash in an economic downturn. And unlike large corporations, they don't have as many levers to pull to improve cash. And without enough time since our last downturn to improve real cash position is a very large challenge facing small business."
Lawrence GelburdLecturer, The Wharton School
"The Rock 'n' Roll Professor"
"The biggest issue facing small business today is what I call 'I AM' risk -- identifying, assessing and mitigating risks, including human and financial capital, in addition to the macro economy. Most small-business owners spend less time on formally addressing risks."
Clint GreenleafFounder and CEO, Greenleaf Book Group
"Uncertainty. The extent of governmental regulations and taxes is causing prudent businesses to sit on cash, avoid risks and wait on hiring. Washington doesn't want to admit this, or doesn't get it, but their partisan games are stalling the recovery."
Jennifer HillStartup Advisory and Venture Lawyer, Gunderson Dettmer LLP
"One of the many challenges facing small businesses is the shrinking customer base. Consumers are still quite conservative with their pocketbooks, and as a result, organic growth from current and new customers is not growing as quickly as small businesses would like. Business owners are spending more time figuring out how to go above and beyond to keep existing customers, while at the same time figuring out how to cost-effectively reach new customers -- without competing solely on price, which is a race to the bottom. "
Rieva LesonskyFounder and CEO, GrowBiz Media
"There's just too much negativity today. Everyone from banks to the government to big business is so intractable. No one wants to find real solutions. Instead, they want to gain or maintain power. We need everyone to do their share. Banks need to lend, big corporations need to pay their fair share of taxes, companies large and small need to stop offshoring jobs to put an extra seven bucks in their pockets. We need to concentrate on what's important and work together to identify challenges and find solutions. We need to get our inner Pollyannas back -- to see the positivity and work towards common goals. We need to get businesses in a hiring mode so we can star the cycle of recovery."
Bob ParsonsFounder and CEO, The Go Daddy Group
"The biggest challenge for small businesses now is focus. With all the speculation about the financial markets and uncertainty about the future, it's easy to lose focus and worry about things you can't control. You need a clear head to recognize an opportunity when it presents itself. "My best advice for entrepreneurs and small-business owners right now is to focus on what you can control, and other than staying informed, pay as little attention as possible and do not get emotionally caught up in those events beyond your control. Listen to your customers, keep moving forward -- and as I like to say in my 16 Rules for Success, focus on what you want to have happen. Remember, so you think, so shall you be."
Tom SzakyFounder, TerraCycle
"To me, it's the perception that we are in a recession and that it's very hard to start a small business during such a time. The reality is that it's always hard to start a small business, but due to lack of competition, perhaps it's easier in a time when people think there is a recession."
Phil TownInvestor and Author of Rule #1 and Payback Time
"The biggest challenge facing small-business owners right now is to get up in the morning. It looks like we could be on our way to complete political gridlock with a future of unsustainable debt and Zimbabwean billion-dollar bills. Then we can start over with a constitution that limits government interference in our businesses. I mean, seriously, they pass all these new regulations that require a lot more creativity in the lies we have to tell to get around them, they've got us paying for the health care of employees we can't fire and now the National Labor Relations Board is setting up regulations to make it possible to unionize us before we get back from golf. And sexual-harassment law is so onerous, if you have an affair with your assistant, he gets to be COO or retire for life.
"Which means something really cool if you've got the guts to act on it. The big guys are scared to death that they are going to get unionized, health-cared, over-regulated and then perp-walked for Sarbannes-Oxley, so they ain't hiring, they ain't investing in the U.S. What they are doing is figuring out how to move to Switzerland and pay one-third the taxes.
"The huge opportunity for the little guys who are gutsy enough to invest right now is the chance to grow big, fast. Hire temps and consultants, stay clear of employees as much as possible, stay light and quick -- but I think now is a time to jump in there and start grabbing business from the big elephants who are too scared to move or are moving to Singapore. Go for it. There is blood in the streets and fear on the loose and there is never a better time to grab off a bigger piece of your market."