Whether it’s performing day-to-day operations or planning long-term growth, small business owners face countless obstacles to their success. From rising office supply costs to the health of the national economy, sometimes prioritizing the issues to focus on is a huge challenge by itself.
“There is no magic bullet in business,” said JJ Ramberg, host of MSNBC’s “Your Business” and founder of Goodshop. “Most of the things that people are worried about are things that they have little or no control over. So, you have to prepare for a variety of situations.”
But what situations should business owners be worried about? In its 2017 Small Business Survey, TD Bank surveyed 553 small business owners across the U.S. to find out the biggest business challenges they all face.
Here’s a look at those top concerns and how they could help shape your priorities.
Rising Interest Rates
With the three Fed rate hikes since December, interest rates and their impact on finances are on everyone’s minds. According to the 2017 TD Bank Small Business Survey, more than a fifth of small business owners said rising interest rates would be the top challenge to business operations in the next 12 months.
Their cause for concern is understandable. Rate hikes can make securing funding for a small business more difficult than it already is. Cash management — and planning it properly — is also a common challenge for small companies, said Jay DesMarteau, head of small business banking at TD Bank.
“Although some types of small business loans offer fixed interest rates, others might adjust with a Fed hike,” DesMarteau said. “Business owners need to be aware of the terms of any loan, line of credit or business credit card they have and how interest rates could impact monthly payments.”
When seeking a business loan, business owners should speak with their banker to understand all options and how interest rates fluctuations could impact monthly payments.
Read: 6 Things Entrepreneurs Need to Know About Getting a Business Loan
Healthcare Costs and Changes to Healthcare Regulations
More than rising interest rates, healthcare has taken center stage in the political arena as Republicans attempt to eliminate Obamacare. But whatever your political view, healthcare costs and regulatory changes have a significant impact on your business. According to the survey, almost a quarter of small business owners said healthcare was their primary challenge.
“Most small businesses operate on really tight margins and carefully weigh their monthly expenses versus income,” said DesMarteau. “Things like a change in healthcare costs or regulatory changes that make it more difficult to do business in a certain industry could impact the bottom line and create instability in a business’ budget.”
New Presidential Administration
Healthcare costs are inextricably linked to the new presidential administration and its push to repeal Obamacare. Perhaps not surprisingly then, 25% of small business owners in TD’s survey said the new president and administration would be a primary challenge for them in the next 12 months.
Despite his support for small business and tax cuts, President Trump’s reception among small business owners has been mixed. Many don’t believe their access to capital will get any easier with Trump in the White House. But whether or not Trump is a positive factor for small businesses, any new administration means change.
“Uncertainty is the enemy of planning. Small business owners are resilient and can often deal with change, but it’s incredibly hard to plan if you don’t know what change is coming,” said Ramberg. “As a general rule, companies should keep enough cash on hand to get them through should something drastically change in their business.”
Taxes, Jobs and Investments: How Trump’s Presidency Could Affect Your Wallet
Local and Regional Economic Health
Health of the local and regional economy is by far the biggest obstacle small businesses confront, with 56% of small business owners naming it as their main challenge. “As a single small business, there is generally not much you can do to affect the health of a local economy,” said Ramberg. “But, as a group of businesses, you can do a lot.”
Across the U.S., many “Main Street” and local business centers have managed to thrive despite worries about the health of the local economy. The reason for their prosperity is cooperation — local companies that work together to bring about change benefit all their businesses, said Ramberg.
“Join the local chamber of commerce or other local business group set up to address local issues. If you are a true Main Street business, getting grants to do things like improve the sidewalks can make a big difference in foot traffic,” she said. Another way to handle an unhealthy local economy is to expand beyond the nearby area. By diversifying in terms of location, you can mitigate the local economy’s effect on your business.