Topics: Right Biz, Market, Partner, Funding, Name of Biz, Marketing, Finding Customers, Profile, Where (niche) Cash Flow, Competitors, Planning, Employees, Team, Time Mgt, Delegating, Professional, Legal Issues.
Starting a Business is filled with a lot of Challenges. Though both novice and experienced entrepreneurs have to face Challenges, the nature of Challenges is significantly different. For the experienced, most of the Challenges encompass establishing a new brand or staying ahead in the field and making the business a significantly profitable one. But for novice entrepreneurs, some unique, but mostly common Challenges like: 1) arranging the funding for startup, 2) choosing the right business, 3) maintaining cash flow, 4) dealing with a significant number of competitors, 5) finding customers, 6) determining the right marketing strategies for making a place in the market, & 7) handling strapped budget situations.
Review the Most common Startup Challenges that new entrepreneurs often have to deal with, & Begin finding Solutions for each of them. If you’re an aspiring entrepreneur, the following advice will help to make your journey to success a lot easier.
#1. Starting the Right Business for you
The Challenge: Two of the most crucial reasons behind failing of new entrepreneurs are: 1) the inability of selecting the right business for your talent & passions and 2) having a potential or growing market.
The Solution: 1) to attain success in your new business endeavor, you’ve to have an outstanding product or service that adds value to your customer’s life. 2), you’ve to go into a market that’s growing or create a new market from your ides. Remember – it’s easier to attract first time customers (novelty, curiosity) but it’s much more difficult to retain them – loyalty – from value & customer care.
#2 Is there a Market out there for me?
Challenge: Is there a sufficient Market for me to start a business?
Solution: Market Research will tell you if there’s an opportunity to turn your idea into a successful business. It’s a way to gather info about potential customers & businesses already operating in your area (competitors?). Use that info to find a competitive advantage for your business.
#3. Leaving your original Career
The Challenge: Most of the new entrepreneurs leave their regular jobs with an over-whelming joy of becoming independent. And that too often with – less than the amount in Bank required for living at least a month or two even without any income whatsoever.
The Solution: Money is something inevitable for living. So, quit your present job when 1) you’ve at least the required amount for living a standard life as a financial fortress and have a robust Business plan (or at least an Exec Sumry (I can help you there Peter@Wiz4.biz), or 2) when you’re earning a sufficent amount from your new business to meet your families needs.
#4. Finding Business Partners
The Challenge: Finding reliable business partners is one of the most critical jobs that a new entrepreneur has to perform. A wrong business partner will provide you with a negative (-) reputation and as your reputation will be connected to your partner, you’ll be risking the success of your new Startup as well.
The Solution: It’s difficult to judge your partner at the first sight, but if he/she has the wrong intentions, it’s bound to be revealed gradually. The best way to try it, is on a trial basis of – say 90 days – to see if you’re compatible. If not, the best way out is to immediately dissolve the relationship with your partner.
The Challenge: You want to start your new business, but you’re facing difficulties for financing as a new business owner/s.
The Solution: Though various ways are there for arranging small business funding, starting from 1) friends & family to 2) conventional bank loans. Many experienced entrepreneurs believe that self-fueled growth (ie, Boot-Strapping) is the best + less-risky one. Instead of trying to establish a big business overnight, aim at your initial customers. If you can provide value added products or services to them – by the virtue of word-of-mouth, your business will develop automatically. However, if you need to take outside funding anyway, don’t forget to consult an Attorney to avoid future complications.
#6. Choose your Business name
Challenge: It’s not easy to pick the perfect name. You’ll want one that reflects your brand and captures your spirit. You’ll also want to make sure your business name isn’t already being used by someone else.
Solution: Do thoro research that cover all the above issues. Ideally, pick a Name easily associated with your product or service (AutoNation, Bed, Bath & B? CarMax, Comcast, EcoLab, FaceBook, Lyft, ManPower, MetLife, Netflix, Paypal, SalesForce, Shopify, etc) or a simple unique name that’s EZ to remember !!!
#7. Strategies for Marketing
The Challenge: You’re unaware about the best possible way to market your products/ services. Your aim is to maximize your ROI with effective and targeted marketing.
The Solution: Again, it’s a useful idea to outsource the marketing part to another third party who has adequate expertise. Prepare a Marketing budget and hand it over to them and they’ll provide an efficient marketing plan. Remember not to take the chance of experimentation at this stage. You can perform that later – when you have a productive baseline.
#8. Finding Customers
The Challenge: Finding new prospective customers.
The Solution: If your product/service adds value to biz or people’s life, you don’t need to spend a huge amount of money on advertising in the initial stages. If you’ve a great product/service, people will automatically come to you. Just remember to keep your patience and approach only those people who show interest in your product/service. Experiment with different techniques, then use the one/s that work best. Create a Customer Profile.
Demographic: Name? Age? Gender?
Background: Where did you grow up? Career? Position?
Goals, Challenges & Pain Points: Life goals? LT Vision? Obstacles
Personal Life: Work / Life Balance? Weekends? Hobbies? Shopping?
Career: Goals? Industry? Job Title? Responsibilities?
Personality: Introvert or Extrovert? Optimistic or Pessimistic? Right-brained or Left-brained? Communication preference?
Web / Purchase Behavior What Social Media sites do you use most? How do you search for products or services? what Sites do you usually shop on?
Finance Factors (if possible) Net worth? Investments? Savings? Own Home? Rent? Debt? Kind? College?
Product Insights/Objections to Sale: any Objections to our product/service? Criteria for buying?
#9. Choosing where to Sell
The Challenge: One of the biggest reasons for the failure of new entrepreneurs is selection of the wrong niche.
The Solution: It’s very common that being a newcomer in the entrepreneurial world, you may not have the adequate expertise to select a profitable /growing niche. In that case, hire a free-lance Market researcher who will survey the related market (the field you want to do business in, and prepare a report of profitable niches). You can then analyze the report and decide on your preferred niches.
#10. Cash Flow – go, go, go !!!
The Challenge: Small businesses can’t survive if they don’t follow Cash flow guidelines. This is probably one of the biggest problems that new entrepreneurs face. For example, you perform a job timely, do the Invoice and get paid after a month. In the meantime, you’ve to bear all your business expenses like your infrastructural cost, your employee’s salary and additionally, your personal expenses. And in case you don’t get paid at all, only some miracle can help you out.
The Solution: Proper planning & budgeting are crucial for maintaining Cash flow. #1) way to increase Cash flow is asking for a Down payment whenever you receive an order. That way, you’ll be able to pay your expenses – while keeping some profit aside. You also get a financial commitment from customers – so they’re less likely to back out of the deal. #2) way of increasing cash flow is asking your customers for faster invoice payments. Say, instead of 30 days you can ask your clients to clear your invoice after 15 days. That way, if the customer is late on payment, you’ll still have some time. 3rd) way is a little uncommon and it entirely depends on your rapport with your own Suppliers or Vendors(V/S). If you can manage to make your V/S agree to invoice you after 45, 60 or 90 days, you’ll have sufficient time to receive your payments and then clear their invoices.
#11. Too Many Competitors
The Challenge: Dealing with too many competitors in the same field.
The Solution: Bring in something unique, trendy and/or new to the market. Customers flock to a business that offers extensive product knowledge and a wide collection of the products they’re looking for.
#12. Poor Business Planning
Problem: Proper planning is the key for startups to get their businesses off the ground. Have you had enough time to write a sufficient plan? Exec Sumry? (I can Help (Peter@Wiz4.biz) Due to poor planning, many businesses fail in the very first year, because they do not effectively factor in challenges & risks. Even if your startup has innovative ideas, but your Biz plan lacks perspective, you are doomed to fail or you’ll have to continuously devise and change them.
Solution: Before launching the business, it is important for Startups to carry out a thoro research by investigating from suppliers to taxes to competitor prices. This approach is the bedrock for a successful business, which needs to be viewed in holistic way so that th Vision for the product or service is aligned with the identified Target audience. Writing effective Business plan helps startups to: 1) define what their business is, 2) the market it serves, 3) how it will conduct operations, and 4) the money it will make & spend.
#13. Hiring Employees
The Challenge: The hiring process can become a nightmare for most of the new entrepreneurs. After completing all the steps of recruitment like reviewing resumes, taking interviews etc, at times, they end up hiring an incompetent person. Yuck, Bad Luck !!!
The Solution: Go through the ‘wanted’ part of the job sections of newspapers. You’ll be able to shortlist some candidates according to your requirements. Next, you can organize a ‘walk-in interview’ and offer them a tour of their future working environments. Next, sit with them across the table and finalize things. Remember to make everything clear for both sides because that’ll be extremely helpful to create a healthy work relationship and hire the ones that fit the vacancies, with respect to both their creativity, skills & attitude.
#14. Lack of a Dedicated Team
Challenge: Due to the lack of a proper team, any business will suffer immensely. Lack of commitment aggravates frustration in the organization which quickly escalates into an open conflict. If the team members start making other commitments due to the fear of being responsible or blamed for failure, businesses will never achieve their goals.
Solution: A dedicated team with a diverse skill set is very important for the startups to grow & succeed. There should be a proper synergy, coordination, & communication among the members of a team. Any team is formed by the individuals who have different range of capabilities with identical focus. This arrangement allows the members to help each other, learn from each other, and put a strong effort in order to achieve success. “Diversity & dedication of a team drives innovation !!!
#15. Time Management
The Challenge: Time Management is probably the biggest problem – especially for the new entrepreneurs. In your own business, you’ve to take care of everything – unlike a regular job where you only have to take care of certain tasks.
The Solution: You’ve to enhance your time management skills. Following are some useful tips:
- Create Goal lists: Make a Lifetime goals list and break it down to annual, monthly, weekly and daily goals. That way, your daily goal will be in front you and you just have to be on track.
- Delegate the jobs that don’t require your personal involvement.
- Simply eliminate the unnecessary tasks.
- Assess your progress on a regular basis.
#16. Delegating Tasks
The Challenge: Probably due to their inexperience, new entrepreneurs often reluctant – when it comes to delegating tasks and they’re fearful they’ll have to redo it all over again.
The Solution: 1) If you’ve a good Team, this job becomes much easier and enables your Team to grow. 2) Taking the help of good out-sources is another way of performing this task easily. The latter might be a little more costly, but it’ll help to get the tasks performed efficiently and in a time-saving manner. More importantly, remember to be absolutely specific about your requirement – so that tasks are delegated with clear guidelines – which in turn – would help to get them completed on time in an efficient manner.
#17. Strapped Budget
The Challenge: Even when you’ve got adequate Cash flow, it ,may look like you have a strapped budget to exhibit your products/services to their full potential.
The Solution: We admit that every entrepreneur faces the phases of having a strapped (short) budget. You can lower the number of the situations by more effective marketing efforts. 1) Spend the money where it maximizes your ROI and 2) stock the rest for other infra-structural and experimental expenses.
The Challenge: Every new entrepreneur goes through a phase where he/she starts lacking self-confidence and feels like giving up. It mainly happens due to initial failures or having growth that is lower than expected.
The Solution: Discuss the matters you’re your Partner, Network or Team – who are aware of your goals. You may even seek the help of fellow entrepreneurs (ie, as a Mentor), some of whom will be ready to offer advice and show you ways to overcome the hurdles during this phase.
#19 Be Professional
Challenge: You will be temped to take short-cuts and maybe even compromise your integrity, because you’re in it for the long run
Solution: Everything about you and the way you do business – needs to let people know that you are a profession running an honest business. That means getting all the materials: professional business cards, a business phone, and a business email address, plus treating your employees & your customers in a professional, empathetic, & courteous manner.
#20. Get the Legal & Tax Issues correct the 1st Time
Challenge: We know you’re busy with development & finding customers, but it’s much more difficult and expensive to unsnarl a Legal mess afterward.
Solution: Does your business need to be registered? Will you have to charge GST or PST? Will you have to have Workers’ Comp Insurance or deal with Payroll Taxes? How will the form of business ownership you choose affect your income tax situation? Learn what your legal & tax responsibilities are before you start your business and operate accordingly. Get a Lawyer !!!
Conclusion: Whether you’re thinking of becoming an entrepreneur or have just entered the domain, be prepared for these Challenges. To achieve success, plan strategically, explore the possible ways, bring in a great product or service to the market and finally, operate your business ethically and care about your employees & customers – and both will help you to succeed.