Small business operations can be disrupted quickly by a few predictable pressures—cash flow gaps, limited access to funding, staffing and labor shortages, and rising cybersecurity risks (especially for ecommerce). In this article, we’ll cover the most common operational challenges small businesses face, why they happen, and practical considerations to help you reduce risk and build a more resilient day-to-day operation.

Cash Flow

One of the most common challenges facing entrepreneurs and small business owners is cash flow management — keeping track of the money that comes in and out.

Different factors can prompt a cash flow issue, such as ineffective budgeting, unnecessary business spending or slow-paying clients. But ultimately if not addressed, poorly managed cash flow can lead to insufficient funds for daily operations, inventory or payroll.

“Nothing can hold a business back like money problems,” explains a post by the online business degree programs at Walden University. “This is even more true for small businesses.

“While most larger companies have enough cash flow to keep up with payroll and keep the lights on, small businesses are often in a less stable situation. If one big client fails to make a payment, your small business may not be able to cover its bills.”

Access to Funding

Another issue that can have an impact on small business operations is a lack of funding, including limited access to credit.

“Financial challenges are hard to avoid, and they make it difficult for your business to flourish and remain profitable,” says a blog by CO, the U.S. Chamber of Commerce site aimed at small businesses.

To be prepared, the article advises, entrepreneurs should consider and understand a variety of funding options, such as traditional loans, personal loans, microlenders, crowdfunding and investors.

“Depending on what stage your business is in, some sources of funding — including a combination of sources — may be more appropriate than others,” writes CO contributor Emily Heaslip.

Staffing and Labor Shortages

Labor shortages continue to be a challenge this year for many U.S. small businesses, according to a survey from the Small Business and Entrepreneurship (SBE) Council.

When finding and retaining qualified employees is difficult, it can lead to operational challenges for small business owners.

Workforce gaps and shortages affect operational capacity and competitiveness — and small businesses, which are disproportionately affected by the shortages, miss out on opportunities, notes SBE Council President and CEO Karen Kerrigan in a press release earlier this year.

According to the SBE Council, 34 percent of the small business owners polled said labor issues impacted their operations and categorized the challenges as “manageable.

The SBE Council’s Small Business Check Up Survey showed 24 percent indicated staffing challenges had a moderate impact on their business and a noticeable effect on operations, and 9 percent said labor gaps had a major or severe impact on their small business.

Cybersecurity Threats

Like their larger counterparts, small businesses face the risk of a cybersecurity attack without the proper precautions and best practices in place to protect their companies from data and process breaches, which can have a major impact on operations.

Ecommerce businesses are seen as inherently vulnerable because of the large amounts of personal and financial data they store, process and transmit, according to cybersecurity experts.

Further, a data breach can be particularly consequential to small ecommerce businesses, warns Victor Congionti, co-founder of cybersecurity firm Proven Data, in a post by Business News Daily.

“Small businesses that focus their attention in the e-commerce space need policies and procedures to create a solid cybersecurity framework for the organization,” he says in the article by BND senior writer Jennifer Post.

“In the case of a cyberattack, a small business cannot afford to have downtime in operations and sales, because every transaction is a marginal financial success that the business depends on.” 

To learn more, see these 5 Simple Ways To Boost Operational Efficiency at your small business, and Tools for Effective Cash Flow Management.