Research: The realities of running a small business
Working for yourself, being your own boss, building a brand – that’s the dream imagined by small business owners everywhere. And while it undoubtedly has its benefits, the reality of running the show also has more than its fair share of challenges.
A recent study commissioned by Prospa has shone a spotlight on the daily battles faced by New Zealand’s small business owners – and the extent of the work they put into making the business a success.
While there’s certainly room for improvement when it comes to business management and work/life balance, it’s proven that small business owners certainly aren’t afraid to put in the hard yards to make their business a success.
Working 9 till 5… and beyond
The research, which was carried out for Prospa by YouGov Galaxy, found that nearly half (49%) of small business owners around the country are working between six to seven days a week on their business, with one in five (20%) working the full seven days.
But long hours aren’t the only challenge small business owners are facing, the research found that over three quarters (76%) of respondents are struggling with one or more areas of business management – namely finance and accounting (39%), IT/technology knowledge (31%) and digital marketing (30%).
Other common struggles were debt collection and managing overdue invoices (20%), sales techniques (20%) and people management (17%).
As a result, up to 43% of small business owners have found themselves putting in extra hours to learn new skills. While 38% of respondents say they’re missing out on opportunities to grow their business and one in five (20%) reported cash flow issues that brought them to the brink of going out of business.
Interestingly, millennials (90%) are more likely than baby boomers (69%) to say there are areas of business management that they struggle with, particularly finance and accounting (52% compared to 33%), and people management (35% compared to 8%).
The personal impact of running a small business
The study also reveals the emotional impact of such pressures, with 88% of small business owners reporting that they experience negative emotions, such as frustration (44%), stress (40%) and feeling overwhelmed or burnt out (38%).
What’s more, a massive 81% of respondents said they’ve had to make sacrifices in order to focus on their business, including cutting back on personal time (58%), hobbies (57%) and exercise (48%). Sadly, time spent with family wasn’t far behind (38%), as well as time spent with a significant other (33%).
Unsurprisingly, 30% even cut back on sleep to get back to the grindstone.
Small business wish list: Skills and investments
Still, small business owners know what’s needed to improve things, with key skills in digital marketing (31%), financial literacy (30%) and sales techniques (30%) listed as having the biggest impact on their ability to manage and grow their business.
And when it comes to investments, 25% of small business owners felt that a marketing campaign would have the biggest impact on helping them grow their business, while 17% said hiring staff and 13% said better, more professional equipment.
Finding the resources to fund equipment is something that Kurt Jacks and his wife Althea, owner/operators of The Rib House in the Auckland suburb of Pakuranga, know all about.
“We found that when you start a small business, it sucks a lot of money, more than we anticipated,” says Kurt. “We needed to do upgrades and renovations to the kitchen, and we also eventually want to upgrade the size of our restaurant, but we needed a bit of help.”
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