When a business is going through some rough times, it is easy to look at and blame one area of the business. Some blame the sales and marketing departments while others blame the leadership. The reality is that there are so many issues that could destroy a business, each issue originating from a different department. Today, we will look at the serious challenges and issues businesses can face and some of their solutions.
Poor Cash and Resource Management
Cash is very important to a business, but things are not always that simple. A business may be making a profit but, due to bad management, its cash could be going out faster than it is coming in. Some reasons why this may be true are poor receivables collection, capital expenditures, and the inability to manage the resources the business has. If a business is not able to manage these resources and reduce instances where money is flowing out of the business, it will not survive for long.
To solve this issue, businesses must ensure they are capitalized adequately, and they have enough cash reserves so they can meet any obligations that come up, whether there are emergencies or downturns. Cash management practices must also be heeded, especially in difficult times as this is when creditors are less lenient on payment terms.
Handling these issues might be easy for small businesses, but professional help may be required for medium-sized and large businesses. Professional help may also be required if the business’s books are so complex that the business owner cannot clearly see what is going on.
Lastly, businesses can check the lending climate to see if lenders are open to alleviate their cash flow issues. Just ensure that the terms are favourable for you and that your business can handle the credit before you sign anything.
Uncertainty and Lack of Planning
Every business leader is uncomfortable with uncertainty. With so much going on in the world right now, many business leaders are especially concerned about uncertainty than they were a few years ago. Uncertainty is the main precursor to short-term planning and lack of long-term planning because some business leaders are not sure their businesses will still be around in a few years.
Due to this, many leaders fail to plan five to ten years into the future – actions which can destroy the value of a business. Business leaders must learn to balance reactive short-term focus with informed and research-backed long-term strategies. Uncertainty makes businesses and their leaders lethargic, unable to take any actions that set up a business for a successful future.
Business research is one solution that could help deal with the difficulties businesses face regarding uncertainty and long-term planning. Business research includes acquiring information from various sources and areas of the business with the aim of planning, maximizing revenues and profits as well as improving other areas of the business. Business research can also be key in the acquisition of knowledge and information for commercial and professional reasons such as setting goals and objectives for a business.
Business research, in this way, becomes an important tool for businesses that want to look ahead and plan for an uncertain future.
Few people do not want to admit it, but every business has at least one toxic employee. As a business owner or leader, you are expected to give your employees some leeway as well as the support and resources they need to thrive.
Most people will appreciate the leeway and not abuse it. Now and then, businesses will hire toxic employees who would rather do their own thing than what is expected of them. In almost all cases, they are the most unproductive employees and holding on to them could ruin your business.
Holding onto these employees shows others that you are willing to tolerate this behaviour. You might end up inadvertently creating a toxic work environment where productivity goes down and no one respects the chain of command in the office.
The best way to solve this issue is to know when to fire toxic employees. Some people can learn and change after a warning, while others cannot. Learn to differentiate between the two and fire employees who will not learn or change fast. As a business leader, you are beholden to the business and all the other employees and not to just one person causing chaos as well as loss of productivity, time, and money in the business.
Not Investing in Professional Development
As a business leader, you should always invest in your professional development. There is so much to learn even after you have completed a graduate degree. An advanced degree arms you with advanced knowledge so you become a better business leader, owner, or manager.
Additionally, investing in an advanced degree helps you keep up with your business as it grows. As this happens, the problems and issues you have to deal with become more complex. Completing an online DBA programme at Aston University, for example, helps you build the skills and ability required to solve complex business problems. It also helps you apply principles of business and management research in your position for the betterment of your business.
Business owners also fail to invest in their employees’ professional development. While you can hire a highly qualified employees, that does not mean they will be an instant fit in your business. They will require some training to get going. They will also require continuous training as the business grows and their roles and what is required of them change too.
In addition to reduced productivity, feelings of animosity can grow in such an environment. This happens when a leader places expectations on their employee and the employee gets frustrated because they cannot do what is expected of them.
As a business leader, it is important to not only hire the right people, but to also ensure their professional development is taken care of. This can be through additional degrees, certifications, and training. Business leaders must keep a close eye on what is going on in their businesses. This will help them see small issues before they become bigger problems and rectify them. If they do not do this, these issues could fester and put their businesses in jeopardy.