Lack of capital
Lack of capital is often the most critical challenge that a successful manager or leader faces as its very success creates this and it quickly becomes a vicious circle. Without very diligent cash flow management and/or raising of more capital, including debt, the business often is constrained by capital as it grows. Often the profit in one operating cycle is insufficient to fund the extra working capital required for the next operating cycle. Many capable managers cannot overcome the obstacles in their businesses cash flow cycle and cannot understand why bankers and other lenders often cannot provide the financing as the manager often does not have the security to support the debt.
The solution is often easier than most entrepreneurs realize. It often starts with a plan to see what your cash needs are and when your cash needs arise. Then one is in a position to manage it and focus on the cash management techniques most likely to be successful in his/her business.
Lack of management skills
Lack of management skills is a problem that is very difficult to deal with in most small and medium enterprises as the size of the senior management team is necessarily limited. These areas of weakness could be in finance, human resources, marketing or any area where the current management does not have the expertise, or the time to deal with the issues.
It can be solved by determining the weak areas and then developing a plan for dealing with those challenges. Solutions can be as simple as assigning the responsibility to an existing manager with a requirement to watch for the obvious pitfalls, to hiring a person part-time or a consultant.
• Lack of focus
• Ignoring risks in their assessment of alternatives and opportunities
• Lack of a plan
• Failure to plan for issues absorbing the majority of your time... [continues]
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