It’s a new year, and that means new challenges for small business owners. Luckily, many challenges can be reframed as opportunities.
Let’s look at how these common worries can be turned into chances to stabilize and grow your business.
1. Securing a line of credit or a business loan
Small business are likely to seek financing for four main reasons, according to the Small Business Administration — startup costs, increasing inventory, business expansion or shoring up the business. Fortunately, loans to small businesses are expected to increase in 2015, according to a survey of lenders by the Small Business Finance Institute. This is good news for business owners looking for extra capital.
2. Finding time to craft a business plan
Sometimes a business’ most valuable commodity is the business owner’s time, but a solid business plan can be worth the investment. Joseph Ferriolo, director of Wise Business Plans in Las Vegas, said research is the most time consuming part. “You don’t know what you don’t know,” he says. “It can be hard to research things that you’re not even aware of.”
Ferriolo recommends that would-be entrepreneurs set aside 10 to 20 hours a week to work on their business plan. Or, if you have the budget, his firm and others like it write plans for businesses all over the world. The SBA also has free tools to help you craft your plan, and sponsors a nonprofit network of business counselors who mentor new business owners online and in local offices.
3. Taking care of legal issues
Legalese is daunting for the most seasoned business owner. “I have a great lawyer when I need and can afford him,” says Julie Jackson, owner of the Dallas-based company Subversive Cross Stitch. “That’s the most prohibitively expensive part of small business, in my experience.”
But legal advice doesn’t have to break the bank. Ferriolo refers clients to LegalZoom, which provides budget-friendly legal services to entrepreneurs. For example, it can help you decide whether to operate as a sole proprietorship or form a corporation. Forming a limited liability corporation with LegalZoom starts at $149, not including state fees.
4. Pricing services competitively
“Most people start off too low in their price points,” Ferriolo says. He recalls one client who was negotiating a lease for a hair salon. The monthly lease was expected to be $3,000, but the financial forecasting in her business plan revealed that she could afford only a $2,000 lease based on her current price points. Signing that $3,000 lease would have caused her to go out of business within a few months.
Raising prices without losing customers takes finesse. Reaching your target price gradually may make the changes more palatable. Some businesses also dovetail price increases with expanded services, so clients feel like they’re getting more for their money.
5. Avoiding burnout
“People think it’s going to be easier than working 9 to 5,” Ferriolo says. But running a company can be much more draining than punching a time clock. Ferriolo recommends joining a professional association with other business owners. “If you’re talking to like-minded people, it keeps you fueled,” he notes.
Jackson has found a professional community on the Internet. “It’s always an aha moment to find someone who really gets what you’re doing and does their own version of it,” she says.
“Trying to keep my line of designs fresh is always a challenge — I have the ideas, but I don’t have the time I did in the beginning,” Jackson says. But focusing on the things she loves about her job helps. “I’m mostly just glad to be able to do this,” she adds.
Starting a new year as a business owner can bring all your natural anxiety to the fore. “Worried? Challenged? All the time,” Jackson confesses.
But new beginnings bring new chances too. Look to the SBA or professional organizations for support and advice, make time for the creative aspects of the enterprise, and watch your business leap ahead in 2015.
For more information about how to start and run a business, visit NerdWallet’s Small Business Guide. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.
Image via iStock.