The great news for small business owners is that, according to the Kauffman Foundation’s 2018 State of Entrepreneurship report, the outlook for the future of small business remains optimistic as ever.
Figures show that entrepreneurs continue to view their business performance positively. Eighty-eight percent of those running startups up to five years old predict their business will continue performing well throughout 2018; and that stat’s at 81% for business owners with companies older than 5 years.
If only things were just rainbows and roses! Despite the relentless optimism entrepreneurs have in their businesses, small business owners also face a series of growing obstacles. If not addressed, or at least strategized for improvement, these issues could threaten entrepreneurship for future generations. Here’s a closer look at the biggest obstacles facing entrepreneurs in 2018 and a few ideas for gracefully tackling them.
1. Becoming More Profitable
According to those surveyed in the report, this is the top challenge for business owners, both in young startups (62%) and established companies (55%).
Becoming more profitable doesn’t necessarily translate to increasing sales and cash flow, either. Rather, entrepreneurs struggle more with basics, such as obtaining licenses, insuring their business, and paying business taxes.
Twenty-one percent of startups and 25% of established businesses also revealed that applying for business loans is becoming a harder process. The consensus across the board seems to be that taking care of these items is as difficult as it has ever been and it’s not getting any easier either.
What can businesses do to lessen the technical pains?
First, prioritize your needs. Are you planning to hire and need to apply for an Employer Identification Number (EIN)? Are you opening a food truck and are required to have a food handler permit? Do you still need to legitimize your company by incorporating or forming an LLC?
Determine which nuts and bolts that your startup needs now, then begin filing applications to register your business as soon as possible. Check in with your local Chamber of Commerce to make sure you’re not forgetting anything. If you need extra help, you could seek out the assistance of a legal filing service. They can work with you and submit forms on your behalf so you have some peace of mind about the process.
2. Lack of Government Assistance
Entrepreneurs surveyed have a glass-half-full attitude about nearly everything… except one thing. The United States as a whole.
This largely centers around the feeling that small businesses and their needs are being overshadowed by major corporations. Sixty-two percent of startups admit to feeling like this along with 68% of established businesses.
That’s a tricky obstacle to remedy because there’s no quick fix for it. The best recommendation is to seek out resources from organizations like the US Small Business Administration (SBA) and SCORE. The SBA offers assistance in helping plan, launch, manage, and grow a business, while SCORE provides business advice from a network of more than 10,000 volunteer mentors and experts.
3. Cultivating More Business-Friendly Environments
Entrepreneurs also believe that the government should make it a priority to foster business-friendly environments. Fifty-one percent of startups and 67% of established businesses are in favor of taking this action—far outranking receiving financial support in the form of grants or funding.
Regarding designated times of the year dedicated to small businesses, we tend to think of National Small Business Week and Small Business Saturday in November. That’s not enough to make an impact. Perhaps now is the time to establish a few new holidays and events to scatter throughout the rest of the year that foster business-friendliness.
Until then, it may be up to the businesses themselves to take matters into their own hands. Host an open house if you recently relocated, sponsor a community event, or even go door-to-door in the area and introduce yourself to other businesses. By being proactive and engaging, you can be the business-friendly change you want to see in the world and inspire others to act accordingly.