Optimism abounds for entrepreneurs in 2018, with stock markets continuing to offer strong returns, strong consumer sales, and a vibrant job market.
Yet despite the enthusiasm, there are still many things that keep entrepreneurs up at night, including the fast-evolving state of technology, increasing risks of cybercrime, the difficulty of hiring qualified talent, and the difficulty in securing traditional financing for funding a small business.
As seen in the recent post, 4 Top Industries for Entrepreneurs in 2018, there are plenty of opportunities for potential small business owners. In deciding where to create your own business, here are the top challenges for entrepreneurs in 2018.
1. The Risk of Cyberattacks
Cybersecurity continues to be a growing concern among small business owners. There is more awareness of the risks, too. A recent Better Business Bureau report noted that nearly two-thirds of surveyed small business workers knew about common cyber attacks such as ransomware, phishing, and tech support telephone scams.
However, those numbers mean there is still the need for awareness and protection. Only about half of those surveyed had heard about:
- Point-of-sale malware that can capture data swiped at a PoS device (52 percent)
- Keyloggers that capture every keystroke made on a device (43 percent)
- Remote Access Trojans, which is malware that provides complete access to a computer keyboard, screen, and files.
A similar survey by Microsoft showed that 50 percent of small business owners are not concerned about data breaches and 25 percent say they are doing nothing to protect their business.
2. Riding the Technology Wave
The Microsoft survey showed that nearly half (49 percent) of small business owners that have been in business for more than five years are concerned about keeping ahead of rapidly changing technology in 2018. For businesses open less than a year, keeping up with technology is slightly less of an issue (37 percent). However, finding the funding to secure needed technologies is a higher concern than for their more seasoned compatriots (33 percent versus 21 percent).
Technologies are evolving quickly and small businesses are leading the way in a lot of innovation spaces. Companies are leveraging cloud technologies and growth in mobile payment systems, artificial intelligence, the Internet of Things, and 3D printing to create new products and services.
Part of the challenge, however, is finding talent to fill those jobs.
3. The Talent Gap
While unemployment rates continue to hold steady, many small businesses struggle to find talented employees to fill critical jobs. Businesses are facing too many unqualified candidates and intense competition for certain skill sets.
In some cases, that means employees are opting to hire for convenience due to time pressures and the need to fill a seat.
In a recent The Megaphone of Main Street Small Business Jobs Report by SCORE, small businesses indicated increased hiring in the past six months for full-time (13 percent) and part-time (22 percent) employees. There is a growing reliance on contractors (12 percent) and a big jump in the one-time project, or gig, employees (37 percent). The report indicated that the work most likely to be outsourced was technology (42 percent), accounting (41 percent), and marketing (38 percent).
4. Focus on Financing
While businesses see the need to hire more talent, invest in technology, and protect themselves from cybercrime, access to traditional sources of lending continues to be challenging.
At Benetrends we help owners with funding a small business through an innovative program that uses existing 401(k) and IRA funds, without tax penalties or early withdrawal fees. To learn more about how Benetrends can help fund your small business in 2018, subscribe to our blog.