As your business begins to expand, the costs to do business also begins to increase. You need to hire employees, leverage recruiters, create an HR department and you finally get your first encounter with those nifty NLB and federal government regulations. Some founders even begin to face the stress of long hours and question whether they have enough passion to take the next step into their growth phase.
As they say, money doesn’t buy happiness and the more money you make, the greater the headache. No matter your business model or vertical, there are problems that face every mid-size business. Let’s explore the top 5 problems facing every mid-sized business and some solutions to help solve them.
As the fate of the Affordable Care Act and potential entitlement cuts hang in the balance, mid-sized businesses need to find an affordable way to provide their employees healthcare or face hefty fines. Health benefits are a major perk for top talent and it’s hard to recruit high-level staff to your business without offering any benefits.
For SMBs, providing healthcare for employees in the current state of the market is expensive. Fortunately, there are solutions and it involves shopping around. With a recent executive order, companies can band together to acquire aggregate health plans that lower the cost of health insurance across the board for companies. There are also other options your business could explore, including:
- Offering lower tiered health plans
- Opening a HSA for employees
- Exploring level funding
From looking at its size, you’d think the US tax code was a complete collection of surviving canonical texts rather than actual federal dictum. There are literally tens of thousands of federal regulations businesses have to follow from energy regulations to expensive occupational licensing laws. Beyond this, payroll, capital gains, and income taxes can be cumbersome and costly overtime.
Honestly, there’s no way to get around regulations so it’s important that you’re up-to-date on them, as much as one human can actually possibly ascertain. You can seek compliance by hiring a lawyer and tax expert to manage your finances, but this also comes at a cost. If there’s one silver lining in all of this, it’s that your business is not alone.
There are programs out there where you can circumvent some regulations. In terms of complying with energy benchmarking laws, you can hire an energy consultant who will save you more money than you spend for compliance. A tax expert may also find loopholes and deductions that can offset the cost of keeping on retainer and ensure your business doesn’t get audited.
SMBs often struggle to maintain cash-flow after the coffers from your initial investments have been raided. This doesn’t mean that mid-sized businesses are excluded from seeking out additional investments or even federal grants funding. This represents a make or break time for industries operating in growth markets, as they need to establish a customer base and bottomline.
It’s important to recognize the red flags early, such as client dependency. Also you need to focus your efforts on retaining customers before your start to reach new markets. You’re going to need a customer base to stabilize your bottomline as you seek to expand.
You may find your business stuck in between a rock and hard place just about now. You need to grow your customer base to support your bottom line, but you don’t have the resources or know-how to conduct a marketing campaign. Beyond this, external factors, such as economic downturn or a lackluster labor market will make it harder for your business to grow.
You don’t need to launch a new product to make your business more profitable. Consider making pricing more competitive if you can afford it and offering customers buy-in loyalty programs that offer short-term customer benefits and long-term profitability for your business. In today’s age, every business should at least have a small investment in developing their search engine visibility, either through SEO or PPC advertising campaigns. Never forget what the power of email marketing can do for customer loyalty!
According to one study, hiring a new employee can range between 1.5 to 3x more than the salary of the position alone. You also need to start filling out mid-level management, especially if your business has multiple locations. Depending on your industry, it may be hard to find talent in your area as well.
Many businesses are actually turning to the coworking space to leverage remote employees and save money on renting out an office building. With remote crews, there are service partner platforms available to help monitor and manage employees without the cost of the overhead. Balancing talent with salary is perhaps the SMB’s biggest challenge.