Small & Medium Business Challenges: Hair & Beauty Salon in Auckland, NZ - Report Example

Paper Type:  Essay
Pages:  7
Wordcount:  1826 Words
Date:  2023-11-20


Chandigarh Hair and Beauty Salon is based in Auckland, New Zealand, and offers a variety of services, which include; highlighting hair colors, facial hair straightening for boys, half-face wax, hair, and beard cuts for men, and men's hair. The salon was selected to be used in this study as it exhibits the characteristics of ideal small and medium enterprises

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In the current world, business faces challenges that may be obstacles to their existence. Some challenges cut across all businesses, but some are specific to small and medium businesses. This study aims at researching salons to identify the challenges faced by small businesses and how they can be overcome


The objective of this study is to investigate the challenges that are faced by small and medium enterprises and identify how they can overcome these obstructions


This study will use secondary data. Scholarly articles and academic journals will be reviewed. The descriptive method will be used in describing the findings of different authors. Data from Chandigarh hair and beauty salon in Auckland, New Zealand, will be used to determine how businesses can overcome the challenges.

Challenges Facing Business

Client Dependent

One of the significant problems with small and medium businesses undergo is dependent on one customer. In these businesses, you find that a single client contributes more than 50% of the business income (Conner, 2015). This converts the business owner into an independent contractor rather than the owner. Client dependence puts the business at risk of collapsing in the long term. This is because the main client may avoid taking risks of adding employees in an area that may not be demanded by them in the near future. And therefore, this risk is transferred to the small business. If their specialization area no longer holds a fair share in the market, the business will soon be closed or sold at a loss.

Money Management

Every business requires sufficient money to cover all the necessary bills. Most of the time, small businesses are not separate entities from the owners, and the demand for money for the business, and that of personal life may end up not balancing (Conner, 2015). Demand in one sector may put pressure on the other. Small business lacks cash reserves that may be used when an emergency needs to be sorted out in the business. As the business grows, more cash flows in, taxes and counting become more complicated. Bookkeeping becomes a more challenging task for the business owner (Conner, 2015). Poor bookkeeping translates to poor money management, which may hinder the enterprise from expanding. Poor money management may lead to the business closing due to the inability to pay its bills or make losses.

Most of the executive and business owners focus more on profits. However, when capital expenditures are draining the cash, the business fails to remain relevant for long. This is usually the repercussion of the businesspeople focusing more on profit creation rather than focusing more on cash creation. Therefore, there is a need for proper cash management that ensures that a business has sustainable means of cash creation and makes a profit at the same time. A company that has poor cash management in most cases exists in the market during the economic recession periods when there is less cash flow, and creditors are not willing to extend payment durations.


Most of the business owners are always in their business premises. They fear that the business will not perform as they expect if they are absent. Thus, they spend most of their time on the business premises, and they rarely take breaks. They have no leaves and time to relax and mediate leads to fatigue (Conner, 2015). And the pressure to perform better in the business wears away even with the most successful businesspeople due to fatigue. Fatigue may result in business owners making decisions in haste without putting too much thought into it. The rushed decisions put the business at risk as some may not be the best of the business. Fatigue causes some businesspeople to decide to abandon their enterprise when all they need is a little break. Businesspeople find it difficult to balance between their personal lives and business (Conner, 2015).

Founder Dependence

The continuity of most small businesses depends on the owner. Business owners, in most cases, are not able to delegate principal duties as the business grows. They make all the significant decisions, and the employees or their close family members have no idea how to operate the business. Therefore, if the owner falls sick or gets into a situation that does not allow them to run the company, it is closed indefinitely. However, a delegation of duties and reducing the owner’s dependency is usually challenging. It involves risking the quality of services that the business offers and may affect the firm's general operations. Balancing between the quality of services and the reduction of business dependence on the owner is a challenge the business owners need to overcome to ensure the business's continuity.

Balancing Quality and Growth

Business struggles with establishing their brands while at the same time establishing growth in their market share. To achieve growth, the business must sacrifice at a given point (Thiagarajan, 2019). The sacrifice means that it may not be possible for the business to meet every customer's needs, and the business owner may not be able to supervise all the widgets. However, personal engagement and attention to detail by the business owner usually play a significant role in the business's success (Thiagarajan, 2019). In most cases, business people may find themselves obsessed with the quality of service or product that they offer, and they forget to build their brand. Therefore, businesses need to balance creating a brand for themselves and delivering quality products and services as both are crucial for the company's success.


There is the pressure to be more successful in the business world today, making more money, keeping a job, or competing effectively with other businesses. As a result, the businesspeople are tempted to lie, or omit information, steal some money in the name of keeping the business running. Such habits affect the trust level between the employer and employees, among the business partners or the business shareholders. Without trust, the operation of the business does not run effectively (Conner, 2015). Trust is a need for all business players to act in a manner that will promote the business's existence. When trust is compromised, every player will try and act in a way that will satisfy their need at the expense of the business. Integrity is one of the major challenges that a business needs to overcome for it to succeed.

Increase in Competition and Selection

Starting a business has been made easy, but the innovations available. However, the challenge is usually staying in business. In the market, you find companies competing to sell related products, while other enterprises focus on offering a specific product or service. This offers the customers a broader selection of their needs and can change their suppliers anytime (Conner, 2015). Thus, the business usually struggles to create the right perception of its products to its customers. The businesses must also create a good marketing strategy that captures the attention of their potential clients. It is usually a challenge for the business to overcome the high levels of competition capture new customers and create means of retaining the customers.

Marketing and Customer Loyalty

Businesses are currently facing the challenge of marketing to reach potential clients and maintain existing customers. In the current period, the marketing channels have changed from the traditional forms of marketing. The business has turned to social media, texting, email, and other forms of communication to reach their potential customers. However, it is a challenge for the business to establish the right channel to reach its customers (Conner, 2015). The business also has the challenge of maintaining new customers as they are constantly being enticed but other competitors offering the same services. Business people have to devise mechanisms of attracting new customers and maintaining the old ones without necessarily focusing on the price, which is always a race between businesses.


The world’s economy is operating in debt, and the economic struggles are becoming more pronounced. As a result, business people are experiencing uncertainty in planning about the future of the business. Thus, they end up focusing on the short-term and forgetting about the long-term plans (Mario, 2020). Although short-term plans may feel right due to the changing global economy, failure to plan for the future destroys the value and the brand of company goals. Global news tends to leave one with uncertainty and may not get anything done. Business people have to challenge finding a balance between fulfilling their short-term goals and establishing informed long-term strategies that can adapt to the changing environment—failure to plan for the future results in the business being pushed out of the market.

Problem Solving and Risk Management

Businesses face the challenges of identifying, preventing, and eradicating the occurrence of risks. Businesspeople and owners lack the required skills to deal with the risks facing the business. Therefore, the businesspeople are also moving from one problem to another without actually solving the existing one. This consequently leads to business failure. for the business to succeed; it must develop the skills of identifying the risks before they occur and develop the necessary skills of knowing the efficient steps to take to solve the risks as they occur.

Finding the Right Employee

One of the major challenges that the business faces is finding the right employees, the ability to retain them, and training them to ensure that they work towards the vision and the mission of the business (Handayani et al., 2017). In small businesses, one employee's personality can have an enormous impact on the performance of the business. Therefore, business owners and executives must devise a mechanism for choosing the best strategy for hiring their employees that will serve the business. However, the recruitment process continues to be a challenge for both small and medium enterprises (Handayani et al., 2017).

How to Overcome Business Challenges and Improve the Business

Money Management

For a business to remain competitive in the market, it must manage its finances and have cash reserves to finance the business during the recession period. Business leaders should always track how much money the business has, where it is coming from, and how it is being spent (Yoshino, 2016). This helps the business monitor its source of revenue creation and reduce cost reduction and, therefore, increase profits. As the business grows, its books become more complex, and it may become difficult for the business owner to manage them. It is, therefore important, to hire finance professionals as the business expands. This ensures that the business makes the right financial decisions which are based on their records. Fiancé management allows business people to know where to spend more or less to maximize their profit and increase revenue creation (Yoshino, 2016).

Cite this page

Small & Medium Business Challenges: Hair & Beauty Salon in Auckland, NZ - Report Example. (2023, Nov 20). Retrieved from

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