How Important Are Focus and Control to a Small Business?

Focus and control are vital for a small business to thrive. While the initial start-up of a business may seem like a fun side project, it can turn into a serious endeavor and quickly become overwhelming. How is it possible to keep up with human resource requirements, tax obligations, state laws, federal guidelines, marketing and business growth simultaneously? Just when a business owner feels that one issue is handled, something else pulls their attention in a completely different direction.

A small business can and will demand attention in completely opposing ways each day. However, if focus and control are lost in any one part of the business for more than a moment, it can cause serious problems that can negatively impact the entirety of the business and the bottom line.

More specifically, losing control could impact taxes and the ability to make payroll as well as affect overall business performance, quality and employee morale.

Losing focus and control of small business finances

The financial aspect of running a business can get confusing and problematic quickly:

Taxes

Losing focus and control of business finances could put a company in a very precarious situation. Taxes play a paramount role in business finances, and depending upon the type of business (service-based or retail), losing focus in this area could be detrimental in various ways.

For example, a company may not account for, not pay, or get behind on federal and state taxes. Federal and state tax laws are comprehensive and complicated, so if the company does not take into account these laws when pricing goods and services, they could end up in a great deal of tax trouble.

Pricing and profit and loss

If a business is in the retail arena, paying too much for the products that they sell could do irreparable harm. The more a business must pay for the goods it sells, the higher the markup will have to be in order to cover costs, thus eliminating competitive advantage. Because of this, the business would lose customers and not be profitable.

On the other hand, if the business is in the services arena, it needs to be able to offer the best services at the best prices in order to win business over competitors. To do so, the business must have the best employees to perform those services on the company’s behalf. This means being able to offer comparable and competitive salaries and benefits to entice employees to remain loyal and always perform at their peak levels. If the business cannot offer these incentives due to loss of focus of small business finances, they will lose good employees and, in turn, future business to competitors.

Losing focus and control of human resource issues

To foster any sort of growth and success, small business owners will likely need employees to help. While this does bring its own difficulties to business finances, it also brings a unique set of complications to the business overall:

Human resource law

Human resource laws, just like tax laws, are applicable on both the federal and state levels. There are a myriad of regulations that govern HR, including who can be hired, when they can be hired, the minimum payment, and whether they must be paid hourly or yearly. With all of the rules at different government levels, managing and controlling HR compliance is tricky.

Common HR issues

In addition to compliance, HR also has to handle employee issues, like:

• Poor job performance.
• Harassment.
• Personality conflict.

Additionally, employee morale affects performance. If morale is low, chances are employees will not want to perform at their peak. In turn, if an employee is not happy with their current position or feels underpaid or underpraised, they are likely to find another job where they feel happy and fulfilled.

HR legal problems

Employees also have the potential to cause a company legal trouble. For instance, if an employee of the company were to physically assault a customer or mentally abuse another employee, the company could be at fault and have a lawsuit filed against it, potentially resulting in astronomical legal fees and settlement funds. Similarly, if an employer wrongfully terminates an employee, the company could be held liable by the Department of Labor.

Growing pains are integral to any new small business. Every successful small business owner wishes they would have done some things differently in the beginning; these are lessons that they learned the hard way. Encountering these difficulties is not a unique situation, but such challenges can seem insurmountable while in the midst of them.

However, they are not impossible to overcome. An entrepreneur can access resources to help navigate these turbulent waters. If you are feeling overwhelmed, unfocused or out of control amid the hurdles of early business management, I’m more than happy to help. Find me at BrowningBusinessManagement.com

Article Sources:
https://web.blockadvisors.com/small-business-owner-unintended-tax-consequences/
https://smallbusiness.chron.com/retail-pricing-work-60314.html
https://www.business.com/articles/set-price-services/
https://www.northeastern.edu/graduate/blog/hr-laws-to-know/
https://www.tlnt.com/hr-101-these-four-hr-mistakes-are-causing-the-most-lawsuits/
https://www.cnbc.com/2020/02/14/here-are-the-top-mistakes-that-almost-every-entrepreneur-regrets.html

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