As with anything worth doing, building your own business is not without its difficulties.
The saying, “nothing good comes easy” also applies in the business world. As a newbie entrepreneur, you will face some challenges. This isn’t to scare you. It’s important you find solutions once you encounter these problems.
As a business owner trying to manage a business, there are challenges you will encounter. Although starting a business can lead to personal and financial rewards in the future, you are likely to face some challenges. You will have to put in more time, energy, and money than you had imagined. With some careful planning, and reading our favorite book The E-Myth Revisited, you can guess some of these challenges and overcome them before they become critical.
So, what are some of the challenges of starting a business? In this blog, you’ll learn some challenges faced by entrepreneurs and how to overcome them. Some of these challenges include money, time, competition, team building, cash flow, and lack of planning.
Let’s dive in, shall we?
Lack of courage
Some entrepreneurs lack the courage to pursue their passion. They get scared even before they have a chance to prove themselves. I get it. The life of an entrepreneur is a shaky one, especially during the early stages. Every decision and initiative goes through a stage of uncertainty.
How to overcome: It goes without saying that everything is scary at first. So, it’s okay to get scared. With the competition out there, it’s easy to feel as if you have nothing worthwhile to offer. While it’s true that things get shaky at times, it also gets better over time. It is better you start and if you have to fail, fail forward. Learn from the best and keep pushing.
Coming up with a business idea
Before you can start a business, you must have an idea or series of ideas to select from. It can be quite challenging to come up with the right business idea. As an entrepreneur, you should be able to see what others cannot see. If they see problems, you should see solutions. The question is, “how do you turn these ideas into a business?”
How to overcome: Here’s a great book Start with Why by Simon Sinek to help you. When looking for ideas, go for something you have knowledge of and would love to do. Don’t always make it all about the money. What are you passionate about? What business would you venture into if you weren’t afraid? Be honest with yourself.
Sourcing for funds is a major challenge when starting a business. It can be hard for entrepreneurs to source for funds, especially from a financial institution. You might decide to borrow money from friends or take out from your personal savings.
Starting a business can be exciting. It’s common to find some entrepreneurs diving into it without having a financial plan. A common mistake young business owners make is starting a business with the aim of making money and forgetting that it takes money to make more money. You can’t make money if you fail to fund the business from the onset. You need some amount of money to register the business, design logos, build a team, and grow the business.
Depending on the nature of your business, you might not need a huge amount to begin. But, you want to be sure you have something to keep the business running.
How to overcome: Before starting a business, make sure you have enough money to sustain you for a while (a year or two). You can seek out loans from banks or local credit unions in your area. If you have enough personal savings, you can also use that. Others prefer borrowing from friends and family. Whatever option you decide, make sure you have a detailed business plan. It is with the business plan that you can generate funding and investment for the support of your business.
It’s common to think you’ll have more time on your hands once you start your business. Truth is, starting a business is a full-time job. It’s something you need to commit to at the beginning stage if you must see results. The key here is to maintain a work-life balance.
Managing your time can be hard when you have so many responsibilities. How do you as an entrepreneur manage your time? What task do you handle and which do you outsource or delegate to your team? Finding a way to manage your time helps in the long run. It frees up some time for you to focus on other important business and personal matters.
How to overcome: It’s important you learn to organize and prioritize tasks. Make a daily list of what needs to do and prioritize them. Get on with those that need urgent attention and handle the rest later. You can also set deadlines. That way, you put aside any form of distraction and get to work.
A common challenge faced when starting a business is cash flow. It’s hard to survive as a business if you’re running out of cash. Your inability to adhere to a cash flow guideline is a challenge. As an entrepreneur, you’ll have to take into consideration expenses such as infrastructural cost, employee’s salary, and marketing budget.
How to overcome: Keep track of your finances; make a list of your monthly expenses. Audit your expenses and cut back where you can. If you’re unable to cut back, go for cheaper options. Don’t forget to send invoices on time to avoid delayed payments. Also, stay on top of stock management; keep track of what you have and what you should buy.
Trying to do it alone
Truth is, you can’t! It’s going to be hard, strenuous, and challenging. Thinking you can do everything alone is one of the most common mistakes new business owners make. You will need advice from people and a strong team on your side to carry out certain tasks.
In the beginning, it’s easy to think you can do it all by yourself, but as the business begins to grow, the workload increases and that takes a toll on you. It is stressful balancing your account, following up on a prospect, scheduling meetings with clients, delivering products, and all that.
How to overcome: Learn to delegate tasks. There’re instances when you get personally involved in certain decisions. There are also other days you need to delegate and trust that your team will make the best decision.
That brings me to the next point.
“Individuals don’t win in business, teams do.” – Sam Walton.
Hire character, train skill.
Your team can either make your company or destroy it. Getting the right people on your team can be challenging. Especially if they have zero knowledge about the culture of your organization or respect for your industry. Most people seek employment only to earn more money. So once you hire them, they look forward to the end of the month when the salary comes.
It even gets hard to build a team if you have never run or managed a team before. What qualities should you look out for? What personality traits and skills are of importance to you? Picking the right team is stressful and difficult. But when done right, the rewards are bountiful.
You will have to factor in the cost and how their culture and personality align with your main business culture. If you value transparency, and the candidate isn’t honest, you’ll find it hard working with him/her. If you value teamwork, you need to look out for a team player.
A team is a prerequisite to building a successful business.
How to overcome: Finding the right people and developing the right skills, knowledge, and competencies are key to building a sustainable business and a harmonious working environment. Have a hiring strategy; be specific about the qualifications for each role. Make sure the candidate is a good fit for the company. Don’t hire in a haste or for convenience’s sake. Focus on value when hiring.
As a start-up, you will have to compete for your brand to stand out. Mind you, there are companies in similar industries like yours. Some have been around for some time, gained some knowledge, adapted to the current marketing trends, and have managed to attract a large audience. As a newbie, you’ll have to compete with all that.
How to overcome: Rather than running away from competition, use it to fuel your productivity. Learn from your competitors and do better. Look for what they aren’t doing and do it. It could be time to review your pricing and value proposition. Look for novel ways to grow your business. Competition drives innovation and security. It keeps you on your toes and pushes you to improve your service or product.
It’s difficult to get clients once you start a business. You just designed your logo and made your first post on social media. You might have even launched a campaign. A month has passed. No client. You’re frustrated and want to give up. For a new business, it’s difficult to attract prospects and retain customers.
Potential customers are quite skeptical and hesitant about a new business. It’s easy to go for what you’re used to than going for what you have no knowledge of. They’re likely to opt for businesses with a large customer and audience following.
How to overcome: You can’t sell to everyone so it’s important you market to your buyer persona (a fictitious representation of your ideal customer). Think of people likely to enjoy your product and service and market to those people. Another way is to have an online presence. Don’t neglect or underestimate the power of the Internet. Having a good website and an active social media page can put your business right in front of your customer.
Need help building an online presence? Click here.
Lack of direction and planning
Another common challenge faced by businesses is a lack of direction and planning. This comes from not having a detailed business plan or process in place. It’s easy to get excited about starting a business that you overlook having a proper business plan in place. Having a plan and process in place keeps you organized and focused. You are more aligned and in tune with your business goals and mission.
How to overcome: Have a business plan in place. This is a crafted document that outlines every detail of your business. Carefully outline the purpose of your business, your audience, goals, and financial plan of your business.
Keeping up with industry changes and trends
“How fast a company can respond in an emergency is a measure of its corporate reflexes.” Bill Gates.
Change is constant. If you must survive, you must keep up with the changes in your industry. If your business operates in an industry that experiences constant change, you have to adjust. Customer needs change, prices fluctuate, algorithms change, and marketing tactics evolve. There’s always the need to stay abreast of new trends.
How to overcome: Disruption is the new normal. Don’t be afraid of change. Rather be willing to adapt and adjust your business to fit the current trend.
Marketing your product/service
For a start-up, the list of marketing options can be overwhelming. Do you go traditional or digital? How do you decide which marketing yields the best result?
How to overcome: Focus on where your audience is and where they hang out? Then, narrow down your marketing options. You can also seek the services of a digital marketing agency to help with your marketing efforts.
Starting a business comes with a host of challenges. Time, team building, money, competition, planning, courage, and keeping up with current trends. But, when you’re able to overcome them, it’s a rewarding experience.
Are you currently running a business? What challenges did you encounter and how did you overcome them. Kindly leave a comment below.
If you’re looking to learn more about starting a business, click here or download our free toolkit below.
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