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The leftovers in the back of the fridge. The number of calories that a supposedly bite-sized candy bar really contains. Clowns.
There are fears… then there are the things that haunt your every thought. If you’re a small business, you are also quite familiar with horrifying fears of all magnitudes.
In an article for Fast Company, Wasp Barcode’s Brian Sutter outlines the following causes of sleepless nights and “Mylanta Moments” for small businesses:
1. Revenue — Growth of or Lack Thereof
Investopedia defines revenue as “the top line of an income statement or profit and loss statement.” It’s the income that represents the health of your business because it reflects the income generated by the focus of your business.
If you’re a retailer, it’s the goods you’ve sold. If you’re offering professional services, it’s the income tied to those services. If your revenue is growing, your business model is working. If it’s not, something’s wrong. But what? Therein lies the rub.
Figuring out the magic formula for revenue growth is akin to wizardry and the learning curve certainly isn’t for the faint of heart.
However, given that 2020 has been a unique year, small business owners are still very optimistic about their success. In fact, the National Federation of Independent Businesses’ (NFIB) Optimism Index rose 3.8 points rose in September — this should banish a few monsters from the closet!
2. Cash Flow — Calculated Success or a Crisis
Having the right amount of money flowing in and out of your business goes hand-in-hand with growing revenue and other financial goals. Margins are the razor’s edge for small business.
If only there really were fortune tellers who could give you fair warning when of labor or material costs are about to spike, if an invoice is about to go unpaid or any other untold force of evil was lurking on the horizon. If only a cash flow crisis were easy to predict.
Small business lender, Fundbox, captures the dread perfectly, noting “running out of cash is one of the scariest things imaginable.”
Fellow small business lender, Fundera also shares an equally disturbing statistic — 82% of business fail because of cash flow problems.
3. Hiring Employees — Magic or Misfortune
Half of all small business worry about hiring employees. Most list hiring as one of their top business concerns. The competition for talent is tight and the challenge of finding the right person is getting harder and harder.
The hiring process is also an investment of time and money. And no one, absolutely no one, wants to go through the nightmare of hiring the wrong person. This will send chills down your spine — 62% of small businesses end up hiring the wrong person.
On the flip side, there’s also the investment required to keep the talent you have. This doesn’t have to be scary, but nurturing your culture and your business practices accordingly takes care, patience and introspection — qualities that can be in short supply in the daily grind of running a small business.
A tip to avoid accidentally hiring a zombie — 48% of businesses found quality hires through employee referrals.
4. Government Regulations — Oh The Horrors!
When it comes to making laws, national and local governments almost always seem to outdo themselves. Tax laws, employment laws, safety regulations, etc. They’re all highly overwhelming.
In fact, the impact and uncertainty surrounding government legislation tops survey after survey of small business owners.
Whether you’re left, right or somewhere in the middle of the political spectrum, the constantly changing dynamics of government regulation are the kind of suspense nobody likes.
Being on the wrong side of a piece of legislation can bury you.
According to the National Federation of Independent Businesses’ (NFIB) 2016 Small Business Problems & Priorities report, nine out of the top 10 issues facing small business were directly related to federal regulation and taxation.
The fears are real. Each year the amount that US businesses pay in tax penalties is enough to purchase a new navy destroyer.
Revenue, cash flow, hiring and regulations are all pretty frightening, but there’s one more thing…
5. Clowns — This One’s All You…
But we were just talking about politicians… All joking aside, by clowns we don’t mean a face of evil paired with a maniacal grin and oversized rubber shoes, we’re talking about the less overt threats.
Ever heard of the Dunning-Kruger Effect? It’s a psychological term that describes a phenomenon between experience and competence. In essence, it says that people with just a little bit of experience are the most dangerous — because they’re less likely to actually know what they’re doing or recognize their limitations.
While it has no relation whatsoever to Freddy Krueger from the classic horror film A Nightmare on Elm Street, a sufferer is still someone you want to be aware of. Researchers are still studying the effectiveness of garlic and crucifixes in repelling these individuals.
They can be the bad hire, the customer from hell or worst of all, one of the voices in your own head. The cure is common sense. Don’t walk into the creepy house. Even if the door’s unlocked… just don’t do it.
The good news is that proper training and management can overcome the Dunning-Kruger effect.
One last tip — that one Reese’s Peanut Butter Cup you just snuck will cost you 12 minutes and 20 seconds of jumping jacks to burn off.
What’s your scariest small business moment? Tell us in the comments below…
All images in this post are courtesy of Pexels.
Disclaimer: The advice we share on our blog is intended to be informational. It does not replace the expertise of accredited business professionals. Anything else would just be…. well… scary.