As a small business owner, the road to success is lined with unexpected turns and road bumps. Without the structure, capital, or manpower of large entities, small business owners find themselves working even harder to remain competitive and generate profits.
We surveyed more than 300 of our business pros to understand what, if anything, is hindering their growth and their opinion on the current economic climate.
Discover the top pain points that cleaning, HVAC, electrical, plumbing, and other businesses experience and see how you can hop over these hurdles with the following advice. Here are some intriguing small business statistics from our survey:
67% of business owners report a lack of applicants and under-qualified applicants as their biggest hiring concerns.
26% of business owners report debt and cash flow problems as their biggest financial constraints.
Although 88% of small business owners are confident in the economic outlook for their business, only 15% report their business is financially healthy and 13% report no issues with hiring.
Not Enough Applicants or Under-qualified Applicants
When it comes to hiring, small business owners report not having enough applicants, and those that do apply are not a right fit for the job.
In fact, 40% of small businesses surveyed identified under qualified applicants as the main problem they encounter with hiring, with not enough applicants (27%), as the second most common hiring challenge. Only 14% of business owners report experiencing no problem hiring.
We’ve all heard how great it is to have record low unemployment, but in many cases, this means skilled workers are have full-time employment, leaving only under-qualified applicants, if any at all.
25% of Small Businesses are Constrained by a Lack of Access to Capital
Business growth is something that every company strives for. But, growing a company is intrinsically tied to the company’s financial health, and one of the vital signs of a healthy business is cash flow. When surveying small business owners, we found that 25% of business owners attribute lack of access to capital as the main inhibitor to the overall growth of their business.
After capital constraints, 16% of business owners identify unforeseen expenses (like a workers’ compensation claim) as a leading financial constraints that impacts business growth.
Although, not every business owner feels like their growth is impacted by financial circumstances. 15% of business owners surveyed report their business as financially healthy.
According to Visa’s most recent Small Business Outlook, 27% of small businesses were reported to have expanded in the last year. Of those that expanded, the main ways they experienced growth were:
New services or products (55%)
Buying more equipment (52%)
New sales/distribution channels (36%)
Merger or acquisition (18%)
To keep the cash flowing in your small business, consider investing in areas that make it easier for you to generate profits and monitor your success.
For example, a well-designed company website can go a long way in generating leads and revenue for your business. With an optimized website, you can make it easier for customers to find you online and purchase your products and services. With online booking, you can be where your customers are and allow them to book wherever and whenever, making it more likely for them to complete a purchase or convert.
Beyond accessibility enhancements, you can also consider establishing measures that make it easy for you to manage your capital. Using a system like QuickBooks Online can help you keep track of your invoice history, estimates, payroll, and accounting. Having a bird’s eye view of this information can make it easy to spot areas for financial management improvement or capitalize on tactics that are already successful.
Some companies may even offer you the short term credit you need. For example, Housecall Pro partners with Fundbox to provide small businesses with the funds they need to propel business forward. With instant setup, fast funds, and fee waivers for early payback, services like Fundbox allow businesses to pay a flat fee for the weeks they need a financial boost. Relying on this kind of service can help you stay ahead even when unplanned expenses or emergency repairs get in the way.
Customer Acquisition and Scaling Prove Difficult
There are a number of factors, outside of a business’s financial situation, that impact a business’s ability to grow.
Nearly 33% of business owners surveyed report that getting customers is the biggest problem they encounter when trying to build their business. Beyond acquiring customers, 22% of business owners report that figuring out how to scale their business is the biggest problem.
Some strategies that have proven effective when scaling include:
Focus on impeccable customer service and take steps to remedy the problems brought forth by your unsatisfied customers.
Implement a follow-up marketing strategy, wherein automated emails or messages are sent to customers to keep them informed and happy.
Offer payment options for hesitant customers such as consumer financing.
Small Business Owners Are Over-Confident in the Economy
88% of business owners surveyed reported feeling confident in the future outlook of the economy for their respective business.
And that confidence is not entirely unfounded. The U.S. Chamber of Commerce’s Small Business Index confirmed that employers are experiencing a confidence boost about their financial future and the state of the national economy. The index revealed that in the third quarter of 2019, 69% of small business owners currently have a positive outlook on their business and the small business environment.
This positivity could relate to the stability of the federal government, compared to earlier this year. At the beginning of 2019, the longest federal government shutdown in history occurred. This quarter, there is no impending government shutdown, and no ominous uncertainty looming ahead for businesses, which could impact how business owners feel about their business economy and the national economy at large.
The Future of Our Small Business Economy
While it’s great to see how confident small business owners are in the future of the small business economy, this business hubris might be slightly misplaced.
The Bureau of Labor Statistics reported that total private industry investment in goods, services, and construction declined by 0.5% from July to August of this year. This downturn in investment could foreshadow future economic decline for goods, services, and construction small business owners.
Moreover, three out of four economists predict that the overall US economy will enter a recession by 2021, due to significant stock market fluctuation and uncertainty in key foreign trade markets. A nationwide economic decline could seriously impact small businesses who, unlike their corporate counterparts, do not have access to additional capital, resources, or manpower to see themselves through this slump.
Small business owners may look to make their organizations recession-proof in a number of ways. But one of the smartest tactics is to focus on your current customers. Leveraging these existing relationships can lead to increased sales without the costs of new customer acquisition.
Consider enhancing your customer’s experience through features like text messaging alerts that guide them through every stage of your job, or payment processing that allows techs to take payments on-site. By paying attention to the details of their experience and working to improve every aspect of their experience, you can delight customers and even win repeat business.
Small Business Survey Methodology
Housecall Pro surveyed 328 small business owners in September of 2019. The survey consisted of five questions ranging from problems with hiring, financial constraints, economic outlook, and more.
The small businesses surveyed categorized themselves in the following industries:
Garage Door (0.9%)
Overcome Your Struggles With Housecall Pro
As a small business owner the road to success might seem like a steep climb. But, rest assured you are not alone. Many small business owners face these common struggles on a regular basis and are able to overcome to surmount these challenges.
With a partner like Housecall Pro, overcoming these obstacles small business owners face is simple. Housecall Pro offers features like simple invoicing, online payments, and advanced report that are all designed to help your service business succeed.
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