PCBT, Guest Column by Nicki Parr: Navigating Key Trends for Small Business Owners

Informed Decision-Making, Financial Courage, and Leveraging AI

Running a small business is fraught with challenges, particularly when it comes to making informed financial decisions, facing financial realities, and integrating new technologies. At WEV, we speak to small business owners on a daily basis who are navigating a myriad of issues. Yet some common themes continue to emerge. Understanding these trends can significantly impact the success and sustainability of their entrepreneurial ventures.

1. Making Informed Financial Decisions: Hiring and Legal Compliance

One of the potential pitfalls for small business owners is the reluctance to hire full- or part-time employees due to financial concerns. Many small business owners believe they can’t afford to bring on an employee, with the additional costs of taxes and benefits, which leads them to cut corners by hiring contractors who should legally be classified as employees. This approach, while seemingly cost-effective in the short term, can result in significant financial and legal repercussions due to high turnover and not being in compliance with State employment law.
 
Instead, the costs of hiring an employee should be viewed as an opportunity to invest in the long-term growth and sustainability of the business. Consider the scenario of a small retail business owner who avoids hiring due to perceived high costs. Through consulting with a business advisor, the owner may realize that the additional revenue generated by an employee’s contribution could outweigh the costs. This realization can transform their business operations, allowing for growth and expansion that would have been impossible otherwise.
 
To ensure effective business decision making, it is imperative to maintain a robust bookkeeping system. Accurate financial records provide a clear picture of the business’s financial health, enabling informed decisions about hiring. With precise data, owners can determine whether they can afford to hire staff and devise strategies to make hiring feasible. Investing in an employee can often lead to increased productivity and revenue, making the initial costs worthwhile.

2. Overcoming Fear: Facing Financial Realities with Courage

Many small business owners operate from a place of financial fear, avoiding a thorough examination of their financial health. This avoidance can sometimes stem from misguided assumptions and a reluctance to face potential negative realities. However, just as personal health requires regular check-ups, a business’s financial health demands regular scrutiny.
 
Viewing a financial assessment as an essential health metric for a business can shift an owner’s perspective. Regularly examining revenue, expenses, cash-flow and profit provides a clear understanding of the business’s standing and what actions are necessary for improvement. This approach not only offers a sense of direction but also often brings about confidence and peace of mind, even if the financial health is not optimal.
 
For example, an owner who regularly reviews their financial statements might discover areas where expenses can be reduced or where revenue can be increased. This proactive approach can prevent small issues from escalating into significant problems, providing a clearer path to financial stability and growth. Small business advisors, such as those at WEV, EDC and SCORE can provide the guidance around what financial metrics a business owner should be regularly paying attention to.

3. Leveraging AI for Efficiency and Growth

Artificial Intelligence (AI) is increasingly becoming a valuable tool for small businesses, enhancing efficiency and productivity. AI applications can streamline various business operations, particularly in areas such as social media management, content creation, and customer communication.
 
AI can automate social media scheduling, ensuring consistent online presence without the need for constant manual input. Tools like Hootsuite or Buffer use AI to analyze the best times to post and can even generate content suggestions. For marketing and blog content, AI-powered platforms like Jasper or Copy.ai can draft articles, create marketing copy, and write emails, significantly reducing the time and effort required for these tasks.
 
By integrating AI, small business owners can focus more on strategic tasks and less on routine, time-consuming activities. For example, an online retailer could use AI to personalize email marketing campaigns, increasing customer engagement and sales without extensive manual effort.

Conclusion

Navigating the complexities of running a small business requires informed financial decisions, the courage to face financial realities, and the savvy use of emerging technologies like AI. By maintaining accurate financial records, regularly assessing financial health, and leveraging AI, small business owners can not only avoid common pitfalls but also position their businesses for long-term success and growth. Embracing these trends can transform challenges into opportunities, paving the way for a more resilient and prosperous business.

 
Nicki Parr is the CEO of Women’s Economic Ventures (WEV), a non-profit organization specializing in providing low-cost and free support to small businesses. For more information about WEV’s small business advisory services, visit wevonline.org/consulting/.