Starting your own business can be exciting but it also poses challenges and learning opportunities at the same time. Understanding and predicting what these challenges are will go a long way in preparing you to handle them when they arise. It is different compared to when you were an employee, working for your boss and receiving a paid salary every month.
The curve is going to be steeper because it is no longer just you performing a specific role but rather, being a multi-tasker in different job functions at the same time because entrepreneurs wear many hats in a business. Entrepreneurial issues are many and varied but there are certain common challenges that every entrepreneur has to face during his/ her journey.
Here are 11 common challenges and how to overcome them.
1. Selecting the right product and/ or service
One important factor in setting up a business for entrepreneurs is deciding what to sell. To start, it could be related to their passion or it could be identifying a demand that they could meet in their community.
If they are undecided about what to sell, they can engage a marketing firm or freelance researcher to help them conduct market research to find out what needs there are and which ones they have the resources to address. Eg. People might drive out of town for a massage so they know there is a local demand that they could fill.
2. Creating a sales strategy
After identifying the demand for a specific product and/ or service, what entrepreneurs need to do is researching for the best way to sell to their target market. They may hire a professional to create a marketing plan or do it themselves.
In order to do this, they must first identify who is their target audience and what is the best strategy to reach them. Eg. If an entrepreneur opens a tuition centre where many young students love to use Tik Tok, this might be the priority medium to reach out to them.
3. Raising initial capital
For entrepreneurs with little capital, there are ways to raise additional funding to get started. The usual traditional route is through a bank loan or government grants. If they have done their research and know that the product and/ or service they are planning to sell has significant demand already, they could start a fundraising campaign.
For entrepreneurs who would prefer to use a self-funding model, they could start with targeting a small audience and building the business slowly. When they have the portfolio, testimonials or recommendations by happy clients, they can start to serve larger client bases.
4. Maintaining a budget
Running your own business can be unpredictable especially when it comes to expenses so an entrepreneur needs to stay prepared by creating and maintaining a budget carefully. A way to optimise the budget will be to prioritise effective marketing strategies and then allocating the rest according to the business needs.
Evaluating which expenses are necessary will help entrepreneurs tweak their funds to better prepare for unforeseen circumstances. Eg. Using a more affordable supplier and reallocating the savings to address higher utility costs.
5. Ensuring revenue sustainability
It is critically important for entrepreneurs to manage their money carefully to account for any potential delay in invoice payments. Besides budgeting, what entrepreneurs can do is to implement a down payment rule to ensure they can afford expenses until they receive full payment from clients.
By sending invoices as early as possible and requesting payment when the projects are completed, entrepreneurs can secure funding to run the day to day operations efficiently.
6. Hiring employees
Hiring the right employees matter and especially for newbie entrepreneurs so they may oversee the hiring process. They may publish highly detailed job listings to attract candidates whose portfolio matches the company’s business needs.
Before interviewing candidates, entrepreneurs can create specific questions to assess whether the candidate might be a good fit for the company and if the role can help them in their career goals.
7. Managing employees
As the leaders of the company, entrepreneurs need to guide their employees on how to best achieve the company’s business goals. A good tip is to provide clear and detailed instructions in written form for each individual role.
When an entrepreneur can communicate the company’s goals effectively, employees would better understand what they expect and what they are working towards. Eg. If the founder of a recycling initiative shares the story of why he/ she started the company, the employees may feel more inspired to work towards the common goal or recycling to reduce the carbon footprint in the world.
8. Scaling the business
When entrepreneurs have established their business and achieved a certain level of success, they might think of scaling the business. This stage takes many factors into consideration, including coming up with ways to address greater demand, working with new partners and reevaluating their roles in the company.
Processes might be changed to better meet the business needs. Eg. If a consulting firm uses software for a smaller client list, they would need to upgrade to one that serves a larger client base.
9. Time management
Entrepreneurs wear many hats in a business so time management is crucial. They may create deadlines to help prioritise their obligations and they may use several approaches to manage time well.
One good strategy is creating goals for themselves and others in the company so they can assess which tasks are necessary and which they can delegate so their time and resources can be used efficiently.
10. Maintaining confidence
Starting and running a business takes a lot of confidence so it is important for entrepreneurs to maintain confidence to lead effectively and make appropriate business decisions. Entrepreneurs may set short term and long term goals so it is easier to track their milestones and key performance indicators (KPIs).
Keeping a community of supportive leaderships and employees go a long way in maintaining this confidence. When entrepreneurs are confident, they will feel more prepared and motivated to address challenges.
For entrepreneurs whose business is doing well, they might consider collaborating with other professionals or businesses. Although this move will help them to increase resources and allocate leadership responsibilities, there are many important factors to take into account.
They need to evaluate which areas of the business need improvement, whether a collaboration will help and how the new combination of skills and personalities will benefit the business. To ensure the collaboration is efficient and successful, it is important to establish the terms of partnership with a lawyer to protect all parties’ interests.
In summary, starting and running a business is not easy but there are ways to help you better prepare for the challenges of running one so that when unforeseen circumstances arise, you will not be as flustered but rather be able to stay calm to overcome the challenges.