This Halloween, Slay Your Biggest Fears as a Small Business Owner
Children may be afraid of ghosts and goblins during the Halloween season, but for small business owners, things that go bump in the night are nothing compared to their real-world fears. If you’re a small business owner, you’re likely more afraid of an auditor from the IRS knocking on your door than you are of Michael Myers or Jason coming at you with a knife.
In the spirit of Halloween, here are some of the biggest fears that small business owners face, as well as tips to overcome them.
#1 – Fear of Catastrophe
The COVID-19 pandemic proved disastrous for small businesses, as it forced more than 300,000 small businesses to close their doors permanently. Many small business owners that survived had to take out PPP loans and other government assistance to survive, and many are facing challenges with having to pay back rent the last two years are suffering from anxiety.
Now, with inflation and interest rates out of control and the labor shortage persisting, small business owners are waiting in fear for the next catastrophe – be it a full-blown economic recession, a fire, a natural disaster or some other event that can drive them out of business.
Slaying the Monster – It’s important to remember that the pandemic was a historic once-in-a-century event, and while hurricane Ian did devastate parts of Central Florida, natural disasters don’t occur very often. Just in case disaster does hit, however, you want to be prepared. Some steps you can take now are:
- Take out small business hazard insurance. It may be an added monthly expense for your business, but it could prove to be worth it when the next crisis hits.
- Check out SBA Disaster Mitigation Assistance. This SBA program allows businesses within declared disaster zones to apply for additional funds specifically for improving their businesses to better protect against future disasters.
- Take out a business line of credit (BLOC). BLOCs are offered to qualified borrowers from both traditional banks and alternative lenders, and can provide you with emergency cash to help you quickly recover when disaster hits.
- Protect your business records. You should always have a backup of your most important business records. You can do this by storing important information on a separate hard drive or through cloud computing.
#2 Rapid Growth
Having more customers or receiving too many demands simultaneously from clients than you can
handle is another monster that may be hiding under the beds of small business owners. While some may say that this is a good problem to have, this fear can threaten your business if you aren’t in a position to quickly obtain additional inventory or are understaffed.
Slaying the Monster –If your business is growing at a rapid pace, the first thing you should do is take pride in knowing that you’re doing something right. After you give yourself that little pat on the back, your first priority should be customer service. Be ready to explain politely to them that they need to have patience because you are experiencing overwhelming demand but assure them that their needs will be taken care of.
You should also have a plan to add more hourly or full-time staff if you find yourself overwhelmed with customer demands, or consider hiring a virtual assistant. If you need more inventory fast but don’t have the cash upfront to pay for it, you may want to consider purchase order financing to help you.
#3 Employees Quitting
Small businesses in nearly every industry are feeling the brunt of the labor shortage, as workers are increasingly demanding higher salaries and better working conditions. The prospect of your best employee – or all of your employees – suddenly quitting at roughly the same time is scarier than the thought of Freddy Kreuger visiting you in your dreams, especially if you employ hourly workers that don’t get benefits.
Slaying the Monster – Every business, no matter how small, must deal with employee turnover. The scenario you want to avoid, however, is having all of your employees quitting in a short period of time. You want to create a system that doesn’t overly rely on a single employee, no matter how good that employee is. You also want to make sure that you create a company culture that your workers feel comfortable and safe in. You should also look to offer small perks, such as quarterly bonuses or limited essential coverage plans that your workers will appreciate.
#4 Getting Audited
There are few boogeymen that are scarier to small business owners than an IRS auditor – which could
mean that you inadvertently misreported finances and that you suddenly owe a fortune in back taxes.
Slaying the Monster – As a small business owner, you shouldn’t be too worried about getting audited if you’ve kept your books in order throughout the year. Only 1.5% of small businesses in the country get audited on a yearly basis, but to prevent yourself from being among them:
- Make sure you keep track of your business finances. It’s especially important to carefully separate them from your personal expenses.
- Carefully document your business expenses throughout each quarter. Sometimes the line between a business and personal expense can be blurry, so make sure when you document a business expense you have a good reason why it should be a business expense.
- Consult with an accountant on how much in taxes you should pay each quarter. You’re probably better off being conservative when reporting your business expenses and getting a refund at the end of the year.
- Stay up to date on new tax laws. The see-saw battle between Republicans and Democrats over who controls Congress and the executive branch has never been more volatile. Expect the tax code to change every time the balance of power shifts to make sure you’re not missing out on new tax deductions.
#5 Continued Inflation
While inflation has slowed a bit in the past two quarters, it is still growing at a rapid pace thanks to continued supply chain disruptions, rising gas prices and higher wages for workers across the board. Indeed, the inflation monster has forced small business owners to raise their prices and fear losing customers as a result.
Slaying the Monster – The prospect of having to raise the prices of your products and services is always scary for small business owners, but here’s the good news: inflation is showing signs of slowing, and while consumers resent having to pay more for goods and services, they’re still spending, according to a recent JPMorgan study. Also, if you raise your prices carefully, you can actually beat out your larger competition, since they’re also raising their prices.
This fear is probably the most prevalent among new business owners. Having to close your business due
to lack of sales does count as a tangible definition of failure, but there are other definitions of the word that haunt small business owners, making this fear much more opaque. Those fears can include the fear of not providing enough income for your family, losing control of your business, or losing confidence in your ability to run your business. An overwhelming fear of failure can take its toll on your mental health, as any unexpected problem can cause you to go into full-blown panic mode.
Slaying the Monster – Fear of failure is normal among small business owners, but having that fear to an unhealthy degree is not good. One of the most important things to remember when it comes to the fear of failure is that, more than anything, it’s psychological. Sometimes overcoming this fear is as simple as developing a positive mindset. Here are some steps you can take:
- Set daily goals. If you feel overwhelmed in the number of tasks you need to complete, try breaking down those tasks on a daily basis. Be realistic in what you can get done every day, and feel good about accomplishing those tasks afterward – they can serve as reminders that you’re succeeding.
- Adopt a philosophy of learning. Failure, in many cases, isn’t a dirty word. Some may argue that there are no such things as failures – just lessons. If you experience a setback, solve it, learn from it and move on with no regrets.
- Prepare for obstacles. As a small business owner, you will face obstacles, both big and small, every day – there may be a delay in the delivery of important inventory; your credit card processing machine may break down, or an employee might unexpectedly not show up. It’s important to prepare for these obstacles by having a backup plan.
- Find relaxation time. Constant stress can lead to serious mental health problems over time. Try to carve out time every day to take care of yourself. This can be in the form of meditation, exercise and spending quality time with your family.
#7 Slowing Sales
Every small business owner fears a sudden slowdown in sales, especially now that we’re living in uncertain economic times. This fear is often exacerbated by the holiday period – a time when many small businesses rely on seasonal sales to survive.
Slaying the Monster – Overcoming this fear comes down to your marketing strategy. Are you offering the proper discounts during the holiday season? Are you implementing a strategy to retain existing customers and gain new ones? Are you offering something different and better than your competitors? Focusing on marketing throughout the year should help you overcome this fear.
This Halloween, don’t allow your fears to stand in the way of running your business successfully. If you find yourself overwhelmed by fear, it’s important to face those fears head-on by making good decisions and celebrating victories and milestones in your business.