10 Challenges of Starting Your Own Business
What are the greatest obstacles that entrepreneurs face when
starting their own business? How can good entrepreneurs cope up with and
overcome business problems? Does an entrepreneur have to face
these market challenges while beginning a business?
If any of the above questions is currently going through
your mind, then I would encourage you to read as I unravel the top 10 business
challenges you would face while starting a business from scratch.
If you are an entrepreneur, I believe that you will be aware
of the difficulties associated with the entrepreneurial process
phase of developing a company from scratch. But if you don't, and you dream of
being one day, then I hope you're going to find this article worth it.
writing this piece to help aspiring entrepreneurs to plan
ahead of time for the challenges of the entrepreneurial process. It's never my intention to deter or scare you from
going to business; in fact, I plan to do the opposite. I want you to enter the
business world and start your own business with a sense of trust.
1. Developing the Vision and Business Idea
Developing a business idea is typically the first obstacle that any entrepreneur faces while starting a business from scratch. Finding the right market opportunity or creating an idea creatively is definitely not an easy job. As an entrepreneur, you must have the courage to face what some cannot face. Although some face challenges, you need to grab the opportunities.
But while facing possibilities is just the beginning. Your ability to forget that potential into a business idea would be the key business challenge. They see this as a business opportunity since the process of turning challenges into business opportunities is like trying to turn lead into gold. I call it the "Creating Value out of Nothing" entrepreneurial process, a process that brings creative goods into life. Below is an example of how the process is going.
Identifying a problem > finding an opportunity in a problem > coming up with a solution > Forging an opportunity in a business concept > Incorporating the solution into the business strategy
Developing a vision is certainly a business challenge because an entrepreneur often has to take on the role of a mysterious. Most individuals are happy with the current way of doing things, but it is the responsibility of an entrepreneur to face and foresee the future.
An entrepreneur must always be ahead of time, or else he will lose his importance. It is the responsibility of an entrepreneur to introduce high-quality goods. It is also the responsibility of an entrepreneur to offer solutions to other people's problems. Enable me to send you two realistic illustrations:
- Back in the days when cars were custom made and only for the wealthy, Henry Ford pictured inexpensive cars for the masses. The vision made Henry Ford one of the richest men in history.
- The Wright brothers imagined a flying vehicle, but they were massively
opposed to it because the idea of flying humans was viewed as unlikely. The
plane is a familiar face today.
2. Building a business management Team
The second business challenge that you will face in starting your business from scratch is to build the right business management team. When I talk about a squad, I don't talk about daily employees. I'm talking about a "strategic round table business team" that will meet periodically to think about ways to expand the business.
The process of building a business team begins well before the question of raising initial start-up capital occurs. Remember I said that the most brilliant ideas are never scaled through the phase of raising venture capital. Ok, this is where most of the emerging entrepreneurs skip it. Most brilliant ideas and goods are never financed because the entrepreneur is trying to raise money as a person. A business team is a critical and often overlooked, essential to successfully raise venture capital.
You are bound to have strengths and weaknesses as an entrepreneur. That's why you need a corporate team to cover up or add to your weaknesses. A team is a must to create a successful company. Now choosing a business team is just the second challenge, passing your passion and vision to your team is the next one. "If you can sell it there, you can sell it all over the world" just to paraphrase a well-known song by Frank Sinatra.
It's your responsibility as an entrepreneur to make sure your team sees the same future. They must believe in your possibilities, and they must also be enthusiastic about making the possibility a reality. If they can't understand your vision, if they can't see the future with you, they don't deserve to be your squad.
Your strategic business team should be made up of your banker, your accountant, and any other experienced entrepreneur who is capable of having a huge impact on your business. A question on your mind right now maybe, "How am I going to pay for this team?" My answer is: I don't know. You're going to have to work out that one out, or better yet, you might consider getting them on board as a partner. The added advantage of this last choice is that they've got everything to gain from your success!
3. Raising Capital for your Business
After creating your concept and placing your business team in place, the next obstacle you will face when starting a business from scratch is to raise money. As an entrepreneur, you are the only one who understands the nature of your business idea. You are the only one who can portrait the story of your future. It's helpful, though, to have a team behind you that understands your vision and is willing to provide investors with extra details and a positive feeling.
Trying to persuade investors of something that does not yet exist is certainly a challenge, particularly in this period of economic recession. Trying to make them understand that you are trustworthy and up to the challenge is not gameplay, particularly when you create your first business and have to prove to the world that you are up to it.
There's more to raising capital than just asking for funds. Many investors want to invest in already developed companies with minimal risk, and they want to make sure they get a return on the risk they took. Many great business ideas never scale through the venture capital stage because the founder is either inexperienced or lacks what it takes to raise the capital required.
To address the challenge of raising capital, you need to build the ability to sell your concept and vision to potential investors. When I say, "sell your ideas," I mean enhancing your communication skills and your way of expressing them. In the capital raising process, you need to have a good story to tell, backed by a solid business strategy, a good business team, and a good sense of opinion. You ought to know how to pitch angel investors and venture capitalists alike.
4.Finding the Right Business Location
Is it a business problem to find a good location? If you were going to start a store, I'd say: yes! Otherwise, I don't know that. But what I know is that it's certainly not easy to find a good business location at the right price. How do you get a place with a rapidly increasing population, a strong road network, and other services at a decent price? Ok, you're going to have to find out yourself.
Nowadays, several office buildings are vacant because of the financial crisis, and leases are negotiable. Try to find a place where more entrepreneurs are starting to share costs and support each other with infrastructure, management, and/or business.
5. Finding Good Employees
Most managers assume that the method of selecting successful workers is a simple job. They describe the process of finding an employee as simply providing a job description and the right employee will be found. But there's a lot, a lot more to it than that. Company owners know how difficult it is to find a hard-working, trustworthy employee. Many of the workers want to work less and get paid more. Finding a successful employee who's going to be passionate about offering his or her services is challenging. Seeking good workers is a minor job compared to the business problem of forging the hired staff into a squad. You may have great workers, but if they can't function as a team, they're useless and will generate nothing but stagnation. A football team can have great players, but if they struggle to play as a team, their combined talents are completely useless.
Employees are the representations of your company to your clients and to the outside world. They show your business culture and ethics. If just one of your employees is rude to one of your customers, it's going to represent a bad picture for your company. Remember: Bad news spreads easily! But you've got to be very vigilant when recruiting workers. Remember the golden rule of business; "Slow hike and quick burn."
Team building and recruiting the right people in science. When you start your own company, find a Taylor Protocols Consultant (your real one) to get you off to the right foot!
6. Finding Good Customers
The sixth challenge you will face in starting a small business from scratch is to find good customers. Note the keyword "good customers." In the course of developing a company, you will come to find out that there are both good and bad customers. You've got to be on the watch for poor customers. Healthy customers are hard to locate. A good customer will be loyal to your business and will be able to forgive you if you make a mistake and apologize for it. A good customer would try to do the right thing to help both him and the business.
Poor customers will still search for gaps in the company's strategy to manipulate them and make a few gains. Bad customers will still try to manipulate the goodwill of the company and search for ways to scam the company off. Bad clients are liable for bad debts. Good customers are building up your business, and poor customers are still trying to liquidate your business. Just when you fire workers, you also need to be prepared to fire bad customers without hesitation. Don't spend all the time and money on consumers who clearly aren't worth it! A lovely saying goes like this: "Don't get up on a dead horse and say: Giddy-up! Competition is the next challenge you will face when you start a company.
7. Dealing with Competition
Competition is the next challenge you will face when you start a company. Most people see competition as a plague, but I see competition as a successful challenge. I see competition as a benchmark for creativity, the key driver that drives innovation and the production of high-quality goods. Without competition, there will be no creativity, and without creativity, the company will stagnate.
I see rivalry as a welcome opportunity, and I want you to do the same thing. Competition keeps us on our toes and drives us to continually improve our products and services. But you need to be warned. The competition will make your company lose its importance in the eyes of your customers, so you must always be on the guard and at the top of your sector.
8. Unforeseen Business Challenges and Expenses
Just as a pilot is constantly on the watch for unexpected bad weather, thunderstorms, and technological glitches, so a good Entrepreneurs must always be prepared for whatever happens. Unexpected challenges can arise in the form of:
- Not being able to make pay
- Poor customer debts
- Losing market share
- Bills and taxes not paid
- Insufficient stock or inventory
- Unexpected departure of workers from positions of sensitivity
- Decreasing working capital
These business challenges, if not properly addressed, can ruin your strategy to create a successful business. Another obstacle you must anticipate is an unexpected spike in business costs. If it is not done correctly, it will result in continuous negative cash flow and, therefore, a business loss.
9. Keeping Up With Industrial Changes and Trends
Changing trends is a problem that you need to plan for when starting a small business. Trends have made high-quality goods and destroyed a lot of business. I know a lot of prosperous companies that have been wiped out by minor industrial shifts and patterns. A common example is the mid-nineties Dotcom trend, where many existing firms have been wiped out by new web-based Dotcom companies.
When the Dotcom era began, business owners were left with only two options; either they joined the Dotcom train or the Dotcom train. Seasoned entrepreneurial process know that the trend is a buddy, and they are always able to rapidly adapt their company to the new trend. Keeping your eyes open to spot trends is really a challenge, but the major job would be your ability to quickly take advantage of the trend. We can see the same thing happening in the retail industry these days. Traditional shops that don't have a webshop have a hard time surviving.
10. Exiting the Business
When building a company from scratch, you will face the task of deciding your exit strategy. Before you start a company, you have to prepare your exit strategy. Most entrepreneurs run their company without any plans to exit, and even if they have an exit strategy, it is difficult to execute it.
It is advisable to prepare an exit before starting a company. The lack of an exit plan is the primary reason why most companies collapse after the founder's death. The exit strategy is very critical for the long-term survival of a company. Currently, how are you preparing an exit strategy? There are metrics that you can use to assess your exit from any company. Most smart entrepreneurs will use a certain benchmark as their goal, and once that particular target is met, they will be out of business. Examples of such benchmarks are the following:
- Annual turnover
- Annual sales
- Customer base, subscribers or number of users;
- Foundation of properties
- Saturation of demand
· Turning over the business to professional managers
When your company hits a certain level of maturity, you will exit by handing it over to competent managers. In this situation, the company still belongs to you, but you are not interested in your day-to-day life. You're going to have to give up your managerial role to assume the role of a supervisory body. When you leave this way, you'll have more free time to look at other tasks or retire.
In this situation, you are quitting the company by selling it to a private investor. It is called M&A (Mergers and Acquisitions) in the corporate world. To exit your company this way means that after the selling and transfer of assets is complete; you never have anything to do with the company again
· Taking the company public
The interesting thing about this type of exit strategy is that when you are selling your company (in the form of shares) to public investors, you still have leverage over the company.
Significant! Before you apply any of these exit strategies, I highly advise you to consult your lawyer or legal advisor. But at the end of the day, it's up to you to determine the exit strategy you want to apply; but always remember: "Your the exit is more important than your entry."