When you’re running a small business, you need to think ahead about problems that may develop later. Some problems are common to every business, whether you’re a restaurateur, a retailer, or an independent consultant. Be prepared for threats to your bottom line, problem clients, lawsuits, and staffing shortages to ensure your company’s success.
Threats to Your Bottom Line
Even if business is good now, the prudent small business owner will plan ahead for tough spells. Pay attention to factors that can hurt your bottom line, such as changing prices of your raw materials or bills moving through your state legislature that could affect your cost of doing business. Keep a rainy day fund to ensure you can continue to meet overhead costs and payroll during difficult periods.
When the Customer Isn’t Right
Most of your clients expect nothing more than fair treatment, but occasionally you may run into one who causes you more stress than their business is worth. This could be in the form of a client who consistently pays invoices late, leaving you scrambling to cover bills. Or, it could be a customer who treats your staff poorly, causing you to lose valuable team members. No business can completely avoid problem clients, but you can curtail the damage by being proactive when problems arise. Remember to politely articulate your expectations when negotiating, and always get payment terms in writing.
What If You Get Sued?
Every business should carry a general business liability insurance policy for protection from lawsuits. According to the Small Business Administration, premiums can range from several hundred to a couple thousand dollars annually. Business insurance can pay lawyers’ fees as well as court judgments. Without this type of protection, it’s very hard to stay in business after a lawsuit.
When Key Team Members Quit
Having a staff you can count on is a must. How you treat your team is just as important as how you treat your customers. Managing staff is a learned skill — don’t expect it to be intuitive. Instead, study management technique books and learn how to inspire great performance. Give positive feedback whenever possible, and always give negative feedback using constructive language and in private.
Plan ahead for common business problems to ensure your company can weather any storm. During calm periods, prepare for challenges like changing market conditions, staffing woes, tough customers, and expensive lawsuits.
Dixie Somers is a freelance writer and blogger for business, home, and family niches. Dixie lives in Phoenix, Arizona, and is the proud mother of three beautiful girls and wife to a wonderful husband.