Most common challenges facing small businesses

Sendy Fulfillment
July 29, 2021
March 3, 2023

Small businesses are the backbone of the economy, but they also face many challenges that can undermine their success. While many factors can contribute to the failure of small businesses, some are more common than others. In this blog, we will discuss some of the most common factors that undermine small businesses and provide tips on how to overcome them.

Poor Cash Flow Management

One of the primary reasons small businesses fail is due to poor cash flow management. Without proper cash flow management, a business may struggle to pay bills or fund operations, resulting in financial hardship. To avoid this, small business owners should regularly monitor their cash flow, forecast revenue and expenses, and plan for emergencies.


  • Create a cash flow statement to track all money coming in and going out of your business.
  • Develop a cash flow forecast to plan for any potential cash flow issues in advance.
  • Establish a reserve fund to cover unexpected expenses or revenue shortfalls.

Lack of Planning

Another reason small businesses fail is due to a lack of planning. Without a clear plan, a business may struggle to set goals, identify opportunities, and allocate resources effectively. Planning can help a small business stay on track, adjust to changing circumstances, and ultimately achieve success.


  • Develop a business plan that outlines your mission, vision, goals, and strategies.
  • Conduct market research to understand your target audience, competition, and industry trends.
  • Set short-term and long-term goals and regularly review and adjust them as necessary.

Ineffective Marketing

Small businesses also struggle with ineffective marketing, which can make it challenging to attract new customers and retain existing ones. Without effective marketing, a business may struggle to build brand awareness and compete in a crowded marketplace.


  • Develop a marketing strategy that includes online and offline marketing channels.
  • Identify your target audience and tailor your marketing message to their needs and preferences.
  • Measure the effectiveness of your marketing efforts and adjust your strategy as needed.

Insufficient Capital

Insufficient capital is another reason small businesses fail. Without enough money, a business may struggle to cover expenses, invest in growth opportunities, or weather economic downturns.


  • Develop a realistic budget that accounts for all expenses, including fixed and variable costs.
  • Consider financing options such as loans, grants, or investors.
  • Build a reserve fund to cover unexpected expenses or revenue shortfalls.

Handling logistics by yourself

Logistics cost refers to the expenses associated with the transportation, storage, and distribution of goods. These costs can include transportation costs, inventory carrying costs, warehousing costs, and packaging costs. For small businesses, logistics costs can be a significant burden and can impact their profitability.


The best way to manage logistics costs is by outsourcing logistics services to third-party providers. This can help businesses save money on warehousing, transportation, and labour costs. Sendy Fulfillment is one such service provider that offers picking, packing, storage, and delivery services to businesses. By using our services, businesses can focus on their core operations and leave logistics to the experts.

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Sendy Fulfillment