What problems generally a business face?

16th Sep, 2025| 5 Min read.

Running a business is never smooth. Every company, whether small or big, faces challenges. These problems can come from inside the business (like money, employees, or management) or from outside the business (like government rules, economy, or competitors).

Here are the main problems explained in detail:

 

1. Financial Problems (Money-Related Issues)

Money is the lifeline of every business. Without proper cash flow, even a profitable business can collapse.

• Cash flow gap – Many businesses sell products/services on credit, but expenses like rent, salaries, and bills have to be paid immediately. If customers delay payments, the business suffers.
• Raising funds – Getting loans from banks can be tough if the company is small or lacks collateral (assets like land or property). Investors may also hesitate if financial records are weak.
• Bad debts – Some customers never pay, which becomes a direct loss.
• Rising costs – Raw materials, transport, salaries, and electricity bills often go up, while selling prices may not increase equally.

👉 Example: A garment shop sells ₹10 lakh worth of clothes on credit in February but customers pay only in June. In March, April and May, the shop struggles to pay salaries and rent.

 

2. Market & Competition Problems

Every business has to deal with changing markets and competition.

• Too many competitors – Hard to maintain customers when there are many options.
• Price pressure – If a competitor reduces prices, customers may shift, forcing the business to cut prices and profits.
• Changing customer preferences – What customers like today may not be in demand tomorrow (e.g., Nokia mobiles lost market share when smartphones arrived).
• Market saturation – Sometimes, almost everyone already has the product/service (e.g., SIM cards, cable TV connections). In such cases, growth is slow.

👉 Example: A local cafe struggles when a big coffee chain opens nearby with better offers.

 

3. Operational Problems (Day-to-Day Work Issues)

Operations mean how the business runs every day. Problems here directly affect efficiency.

• Inefficient processes – Using outdated methods or manual work increases costs and delays.
• Supply chain issues – Raw materials may arrive late or be too expensive.
• Over-dependence – Relying only on one supplier or one big customer is risky. If they stop, the business may collapse.
• Technology gap – If the business doesn’t adopt modern technology (like digital payments or online sales), it loses out to competitors.

👉 Example: A small manufacturer cannot deliver on time because raw material from China is delayed, so clients shift to another supplier.

 

4. Human Resource Problems (People Issues)

Employees are the backbone of a company, but managing them is tough.

• Hiring skilled workers – Talented employees prefer bigger companies with higher pay.
• High turnover – Employees leave for better salaries, creating instability.
• Low productivity – Untrained or unmotivated workers slow down business.
• Conflicts – Disagreements between staff or with management hurt teamwork.

👉 Example: A software startup loses its best developers to bigger IT companies, delaying projects and losing clients.

 

5. Legal & Compliance Problems (Rules & Regulations)

Businesses must follow government laws, but frequent changes create problems.

• Changing rules and regulations– Tax laws, GST rates, labour laws, or industry policies may change suddenly.
• Penalties & Fines – Late filing of GST or ROC returns results in fines.
• Intellectual property theft – Competitors may copy your product, logo, or design.
• Licensing issues – Missing permits can shut down operations.

👉 Example: A restaurant runs without a proper food license (FSSAI). Authorities raid and close it, causing huge loss.

 

6. Management & Strategy Problems

Bad management decisions often create bigger troubles.

• No clear vision – Businesses fail if they don’t know their long-term goal.
• Poor planning – Spending too much money on the wrong things.
• Resistance to change – Sticking to old ways when the market is changing fast.
• Dependence on one person – If the founder or one key manager leaves, the business struggles.

👉 Example: Kodak ignored digital cameras and focused only on film cameras, which ruined the company.

 

7. External Problems (Outside Control)

Some problems are not in the business’s control but still affect it.

• Economic slowdown – People spend less during recession, so sales fall.
• Inflation – Prices of materials rise, reducing profit margins.
• Government policies – New taxes, import/export restrictions, or bans can hurt industries.
• Natural disasters / pandemics – Events like floods, earthquakes, or Covid-19 can suddenly stop business operations.

👉 Example: During Covid-19, gyms, theatres, and travel businesses faced total shutdowns.

And there are other problems time to time they occur. Because of these problems sometime a business try to quit and then BizzXchange helps in solving these problems