What is the biggest challenge for the survival of a small business?

Capital.
Business plan
Turnover
Customer base
blah blah blah ...the list just goes on and on

My opinion, customer payments, I am not talking about the R100 000 payments, they will bust you within a couple of months if not paid, I am talking about those little ones.

You ask why, I have been going through some changes in past few months, looking into ways to become more effective, spending less, trying to find what it is that affects my business the most and how. Today I came up with one of the biggest issues and what affects my growth or what could eventually cripple my little business. Some might say but that's what an overdraft facility is for...mmm your overdraft can only carry you for so long.

I have been winding up the sole proprietor operation, and boy was I in for a surprise with the amount of money I have had to write off and outstanding debts.

Going forward now with the CC I decided not to make use of an overdraft facility and I can now see why having an overdraft tis not always a good idea in a small business, (this is my take on it)you tend to run up the overdraft and sit there with this debt over a period of time which just never seems to go away, much like a credit card ( that's why my credit cards have R500 limits) The reason for this, those little outstanding payments which over time end up restricting both expansion and general day to day operation.

What I have found is that R500 or R1200 little amounts start adding up, you think, well I will just write them off, but every month there is a little more and a little more, until eventually your overdraft is maxed out or you apply to increase you overdraft and because you are turning over xxx amount the bank increases it. The problem is that it can only go on for so long then it will restrict your operation.

So how do you overcome this problem, I would like to hear from other small business owners how you overcome this problem.

An interesting fact, not one of my customers who had companies when I started my sole prop operation over 20 years ago is still operating, every single one of them has gone bankrupt or sold the business.

Maybe that what I should strive for this time around, to build the CC to sell.