Obstacles to Small Businesses

By Steve Marsten

Small businesses are facing countless obstacles to their success at present - whether it’s performing day-to-day operations or planning long-term growth. From rising office supply costs to the health of the national economy, sometimes prioritising the issues to focus on is a huge challenge by itself.

We should be conscious though that there is no magic bullet in business. What we notice is that most of the things that people worry about are things that they have little or no control over. So, you should prepare for a variety of situations.

Hence the question – Well what situations should business owners be worried about? In a recent 2017 Small Business Survey of over 500 Small Businesses to find out the biggest business challenges they all face.

Here’s a look at those top concerns and how they could help shape your priorities.

Interest rates on funding and access to funding is a major issue. With the four big banks quietly increasing interest rates on many loans during 2017, one wonders what the reserve bank does anymore. Small Business owners are well aware of the banks controlling money rates more then ever and the cost of money is a great concern. Rate hikes have made securing funding for a small business more difficult than it already was. Cash management — and planning it properly — is also a common challenge for small companies and good advisors should be part of your management team to assist you.

Beware the banks offering extraordinarily low interest rates for the sting is in their charges. One of the four big banks appears initially to offer small business owners exceptionally low rates however when you add back the fees they are suddenly on equal par with their competitors. Where you pay more is that the fees do not reduce as you pay down your loan only the interest does hence the banks make more money.

Business owners need to be aware of the terms of any loan, line of credit or business credit card they have and how interest rates could impact monthly payments.

Interestingly, other issues that came up were the health of the National and local economies and the rising cost of health care in this country. That will need to be a discussion for another day.

If you have any questions regarding small business concerns, feel free to phone the team at Sothertons on 4972 1300 for more information.