There are ups and downs in business, and there is a moment where small business owners will feel besieged. Small business is not like a big business that has huge advertising and marketing budgets. Also, lawmakers and politician are not doing anything to help small businesses, as well as they, only think about them as they only care about small businesses during election cycles. According to a press release by UPS Stores’ latest Inside Small Business Survey it shows that about two-thirds (66%) of Americans dream of owning a small business. And some of the motivators of this include being your boss (38%), believing in the power of their idea (17%), and creating their next career path (15%).
The fact is that small business are not only living this dream they are also its engine as research shows that small business employs just over half of the country’s private sector workforce and also create seven of every ten new jobs. Even with the fact that small businesses have generated 62% of net new jobs in the past 15 years, the dream is often killed by financial concerns and fear of financial security is one reason why about 45% of Americans are held back from pursuing their dreams. Listed below are some of the things that threaten small business American dream:
• Cash Flow Woes Threaten the American Dream
Apart from the fact that the lack of plans that challenges the American dream of small business ownership another thing that seems like a challenge is keeping the money flowing to operate or grow the business over time. About 50% of small business is closed every year due to a lack of cash flow. Data from the SBA show this high rates and shows that two-thirds of small employee-based companies survive for about two years of living the dream while about 50% make it to the five-year mark and worst is that only one-third make it through to 10 years. A major cause of cash flow issues is late paying customers, and about 64% of small businesses wait on late payments.
• Traditional Financing Is Failing Small Business
Over the years, small business has turned to the bank for financing so they can solve their cash flow issues and fund project that can drive growth to their business. It's not that small business need a large amount to fund their growth, but still, it can still be hard for them to obtain traditional loans. The reality is that commercial lenders require a small business to have great FICO scores and loan thresholds that most of this business don’t have and this has made access to credit incredibly challenging for small business owners.
• New Innovations Are Fueling the American Dream
Everyone wants to own their own business and live the American dream, but for you to be successful doing this, you need a solid business plan and also have experience on how you can overcome the financial hurdles that can dent cash flow (as this is inevitable). Back in the days, many people turn to banks, friends or family when they are having cash flow issues with their business but due to advancement in technology over the years, there are now many options for them. Small business owners can now use artificial intelligence and sophisticated risk models, to finance their business.