First Person: The 3 Biggest Challenges Facing Small Businesses

Running a small business is second-nature to "old" pros like me and my husband. Even with our combined experience of two decades we face considerable challenges. The three biggest challenges facing my small business today are cash flow timing, client diversification and independent staffing. These are issues we have struggled with, and continue to struggle with, as we grow.

Our main small business is a construction and renovation business. Supplies and payroll cost us a big chunk of change. The responsibility of having the cash flow that we need creates a constant source of mental and fiscal strain for the business. Cash flow timing is problematic especially when clients fail to pay in a timely fashion. Tapping back up funds becomes a necessity when jobs grow unexpectedly or when problems arise. An extra $1000 disappears quickly with licensing, permits and hidden costs.

The second largest challenge facing our small business is client diversification. It is easy to become depend on a large client willing to spend on improvement projects. We welcome repeat work and additions to current projects but working these projects solely limits the scope of our small business. During these times, it appears that we are a thriving renovation company, when in fact, we become mere subcontractors. Diversifying the client list makes our business stronger; less dependent than leaning entirely on a single client. Also, some repeat clients tend to "hold you over a barrel" when they offer consistent work. It's not unusual for a customer to ask for a discount when this occurs. There's no discounting payroll!

Another big challenge we face concerns our staffing. We need motivated staffing. We've been fortunate over the years to have skilled labor, even brilliant contractors in our company. However, largely, the old adage is true - good help is hard to find! Once my husband's work truck leaves the crew on the job site, it's a catch 52. He could return to find the work done or not. I don't know if it's lack of motivation or lack of pride but there's definitely a lack in the employee pool. This despite of completion bonuses and competitive pay. This big challenge must be met and conquered to meet the workload required to operating this small business.

*Note: This was written by a Yahoo! contributor. Do you have a small business story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

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First Person: The 3 Biggest Challenges Facing Small Businesses