Starting your own business is seldom a smooth ride. Every single entrepreneur faces challenges getting their business off the ground, so if you are starting your own business and feel like it is an uphill battle – you are not alone.
Not all startup challenges are serious though, for instance getting your website completed on time, however some obstacles can derail a business startup before it has a chance to take off.
Wrong business model
If you have the wrong business model, your business won’t make money. Your business model is a way to describe how your business will generate revenue and make a profit. It is a thought out approach to how you will create and deliver value to your customers. It looks at all the key systems needed to generate revenue, from customer segments and your value proposition, to your cost structure and revenue streams.
Impatience will hurt your business. Don’t jump in straight away and start a business when you have a good idea. Think about it first, develop a workable business model suited to your type of product or service and test it before “going live” with your business.
Lack of skills or knowledge
There are several components to running a business including Finance, Marketing, Sales, Operations, Supply Chain Management and Human Resources, and it is highly unlikely that a first time entrepreneur has expert knowledge in all these areas. This is not a problem as long as you are open to learning new skills.
The true problem with skills deficit is not having a basic understanding of the most critical area: finance. You don’t need to be a qualified charter accountant but you do need to be able to keep track of your income and expenses. You need to be able to manage your cashflow otherwise you’ll run out of money before you even start.
You don’t need to get an MBA before starting your own business, but do make sure you have a basic understanding of each key business system, after all you need these systems in order to run your business.
One of the most common concerns entrepreneurs have is funding. While there are a lot of funding options available from loans, grants to venture capital, if you don’t do sufficient research you may not get the funding you want or you may chose the wrong option which can end up being costly.
So if you want to gain access to funding make sure you do your homework. Find out which type of funding is right for your business, who supplies it and what their requirements are. Look at your business and see how you can sell it to your prospective funder to prove that it isn’t a high risk business, and in terms of investors, what they can expect to get out of investing in your business.
Being the new kid on the block isn’t easy. You have to work extra hard to win customers, particularly if your competitors are large corporations or well-established businesses. This is particularly true of the services industry. If you have no delivery history and therefore no credibility, how can you expect to win against large companies who can beat you on price and have a solid reputation for excellent service?
Instead of being despondent, get creative. Target and win smaller company contracts to get your foot on the ladder. Each win helps to build your credibility. Once you are ready and have a good reputation, then you can go after the big corporates. You can also consider joint ventures or partnerships. Whatever you decide to do make sure that you have an action plan to ensure that you start winning business as soon as possible.
Lack of focus
With so much to do and only so many hours in the day, new entrepreneurs can lose focus and instead of pushing forward in a particular direction, their business is all over the place. They start activities and then switch to others halfway through, leaving a lot of work incomplete. The fear of not having a stable income can also cause entrepreneurs to divert from their business model too soon, making it hard to get back on track again.
If you want your business to actually take off, you need to maintain your focus. You need to learn to prioritise activities and you need to follow through on your action plans. If a distraction arises, question its relevance. Will it help you build your business?
There is an underlying theme to all these challenges and it is called planning. If you don’t plan your business before you actually start your business, it will more than likely start off on shaky ground and you’ll face more challenges than you need to. Planning may not be as fun as product development or generating revenue, but it is essential to the success of your business. It will help you assess and mitigate risks before they happen and it will give you a solid foundation from which to build your business.