Understanding the Challenges Faced by Small Business Owners


Starting a business is a challenge that everyone knows about. However, it is more challenging to maintain it and grow it as expected. It has been observed that many small businesses open and shut due to various reasons. Some reasons are known to outside world while others may not reveal to others. Apart from the finances, start-up businesses face a lot of issues which hinder their progress.  Sometimes, these issues are out of control and the business owners simply take the decision to discuss their products and services. They are beyond the recovery and unable to get any solution.  Some of these issues are explained below:

Health of employees

One of the major challenges faced by the companies is the health of the employees. If they are healthy, they will be able to contribute to the company’s success in the best possible manner. However, if any of the employees fall sick, it will be an unseen cost to the company. They have either to find the replacement of the employee or delegate his job responsibilities to others.  In that case, the company has to spend additional money.

Most importantly, various companies offer medical facilities to employees to ensure the well-being of the employees. In real sense, these facilities are major blow to the company’s owner as it proves to be quite costly when implemented.

Taxes and compliancy

When you are running a business, you will have to follow the tax rules as per the state and country. However, it is not as easy as it may seem. Sometimes, the rules are so harsh that the company pays more taxes than what it can keep as profits. It is again a major issue with start-up companies such as home-based companies. They may not be able to make money due to these taxes and their compliancy. Sometimes, hiring a consultant is an additional expense on the company because the company has to pay him salary and provide him all the resources as other employees.

Business loans

Most of the small companies dream big in the beginning and take loans from the lending companies. Over a period of time, the interest rates and other charges get accumulated. The company has to pay more than what it has taken. If the profits are not as per the expectations, it will be a major blow to the company. The bank will keep the assets so that they can recover their money based on the agreement between the company and bank. Sometimes, the amount gets so big that the company has to close its doors finally to pay off the debts.

Hiring new employees

One of the challenges faced by employees is to hire new employees. The company cannot run without its employees. If the business needs to expand its operations, it has to hire new employees which means that the company has to spend on training, salary, health insurance and other allowances. If the company is unable to make any profit, it will be an additional cost to the company. This way, the financial burden will increase and the company might have to shut down its operations altogether.


When you start a business, you will not be able to hide yourself from your competitors. There may be many in the marketplace that offer better services and run better marketing campaigns. It may not be possible for the business owner to stay ahead of the competitors. They will win over your customers and offer better products.

Above mentioned are a few scenarios, which companies face during their existence in the market. It is suggested to start a business after carefully assessing all the factors.