While each startup offers unique products or services to a specific target audience, many startups share the same struggles and challenges regardless of their industry, business model or other factors.
Regardless of whether you are an entrepreneur who is preparing to launch a new business or you are a struggling small business owner, you must battle these situations effectively in order to run a successful, profitable operation. It may be helpful for you to understand common challenges and to brainstorm different ways to address those issues head-on before they become problematic for your business.
1. Product Research and Development
You likely had a great product or service in mind before you thought about starting a new small business. However, some entrepreneurs fail to research the need for a specific product or service.
They may not understand who their target audience is or who necessary or beneficial their offerings are. They likewise may not research a reasonable price to charge for products and services. When this happens, they may not be able to determine if they can expect to generate a desired return.
They also may not know if their product or service is viable or how to create an effective marketing campaign.
2. Affordable Financing
Another common problem that many entrepreneurs and small business owners face relates to financing. You may have already contributed some of your personal funds to your venture, but you may need access to more capital to cover expenses until your business is financially independent.
Crowdfunding and business loans are common ways to raise funds, but these should be used with care. You could also find a silent partner or sell shares in your company. Rather than take advantage of the first financing source that you stumble upon, ensure that the financing is affordable and is in the best interest of your company for the short-term as well as for the long-term.
3. Talent Recruitment and Retention
The most talented individuals with the best resumes are often heavily recruited by major companies. These large companies can afford to pay a large salary and to offer exceptional benefits, such as health insurance and an employer-sponsored retirement plan.
Smaller businesses generally do not have the financial means to compete with larger companies from a financial perspective.
However, you could offer more flexible hours, extra paid time off and other perks that may make your job offer more appealing. While some talented individuals may be swayed by a large paycheck, others may be interested in career advancement, a management work-life balance and other factors that you may have more control over
Data theft, hacking, and other cyber crimes are serious concerns that affect all businesses regardless of size. Protecting your data is essential to eliminate the impact that cyber crimes can have on your business, but there are more factors at play.
You may also be required to comply with various data security guidelines and laws to protect your employees and customers. While a small business may not have the financial means to hire a full-time in-house IT professional or to have a robust data protection plan, you could outsource the work to a contractor.
Startups may not generate a profit for months or years. Even when your new business does generate a profit, cash flow may be irregular. Managing your business’s finances in these situations can be challenging. Proper budgeting and even assistance from a professional business accountant may be beneficial.
Keep in mind that cash flow is closely linked to affordable financing. You may need financing to manage cash flow for your small business, but the cost of financing can create even more financial stress in some instances.
6. Fierce Competition
Another challenge that all businesses face is fierce competition, but this challenge may be more difficult for smaller or newer businesses to overcome. Consider that larger and established business may have a huge, established infrastructure and a flexible budget to work with.
They may also have a loyal following, brand recognition, and a great reputation. As a newer or smaller business, you may lag behind in most or all of these areas. However, your smaller size may make it easier for you to react quickly and even to be proactive with marketing and in other areas.
7. Effective Time Management
Small business owners generally need to perform several duties while they are growing a business. Some may even try to complete all IT, marketing, accounting and sales tasks as well as other relevant duties on their own.
When you take on too much yourself, you run the risk of running out of time and getting burnt out. In addition, you may not be the most skilled or experienced individual for some tasks. A savvy entrepreneur or small business owner knows which tasks to complete on his or her own and which tasks should be delegated. You also need to know when to hire part-time or full-time employees versus when to outsource different tasks to contractors.
You can see that entrepreneurs and small business owners often face significant challenges. Those who succeed will find a way to directly combat these problems before they have detrimental effects.
A smart idea is to focus on resolving these challenges when you are preparing a business plan. If you have already launched your business, consider revising your business plan now to account for these issues as well as for any other challenges that you are facing or anticipating in the future.
Jasmine Williams covers the good and the bad of today’s business and marketing. When she’s not being all serious and busy, she’s usually hunched over a book or dancing in the kitchen, trying hard to maintain rhythm, and delivering some fine cooking (her family says so). Contact her @JazzyWilliams88