A lot of people like developing their own small businesses for different reasons. You may like the idea of working for yourself and having flexible working hours. Being the boss can also give you the chance to build your skillset and earn more money than being employed. Though all these appeals to upcoming entrepreneurs, research on startup failure reveals that more than 50% of startups do not last for up to five years.
This is a clear indicator of how challenging building a company from the ground up is. Only a third of the businesses that people start end up lasting for at least a decade.
Though you are bound to facing a lot of challenges as you establish your small business, you can learn from entrepreneurs who have made some mistakes in the past. Here are the four most common challenges you should expect and the possible solutions to each one of them.
1- Leadership Failure
Not every business manager is an efficient leader. As you begin your business, you need to have the right leadership skills that can enable you to withstand all the obstacles you may face. Poor management skills are reported to be one of the leading causes of failure in business. If you lack adequate experience to run a company, you will have a lot of problems since you have to make the right decisions as well as supervise and train your staff to conduct different tasks.
Having the right leadership skills can prevent disputes with others at work and improve collaboration among your team. It allows you to come up with the right resolutions when problems arise. Poor leaders are known to demotivate employees and hinder productivity.
To avoid this, you need to ensure that you enroll in the right training program before you even think of a startup. Learn and study the critical aspects of being a successful entrepreneur. Look for a mentor that can always guide you when you need them because learning is an ongoing process. In as much as you have the expertise in a particular field, excelling in all business areas is not possible. You cannot always be the best in every field, including accounting, marketing, IT, and sales.
For this reason, you should avoid running every aspect of your business on your own. Identify your strong points and use them to make your business grow. For the areas where you are not good at, get the right people for the job to help out. Having a team of leaders also prevents you from wasting a lot of time supervising them so that you can focus on aspects that can help you boost productivity.
2- Finding Funding
Most entrepreneurs lack proper funding to take their startups to the next level. You should not let money hinder you from achieving your business goals since there are numerous options available. Not every small business needs a big investment at the start. For you to minimize issues with funds, try to evaluate the type of business you want to start and assess how much you need. Ask yourself if you have enough savings to operate the business long term.
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If you don’t, you can seek financial help from a bank or direct lender such as Cashfloat. They can help you obtain a small loan to start the company and even buy inventory. If you prefer bringing in an investor to chip in, ensure that you have a compelling business pitch that can help you convince them that your company is worth investing in.
3- Time Management
How you manage your time when running a business can either lead to the success or failure of the company. Though you get the liberty to set your own working schedule, you have to employ the right time management skills to boost productivity at work. A work schedule enables you to work within a specific timeline and prevents you from wasting time that can translate to revenue generation. Set deadlines for most of the crucial tasks so that people feel the necessary pressure to deliver. You should also avoid calling for unnecessary meetings, which tend to waste a lot of time.
Avoid overworking and neglecting other aspects of your life, such as bonding with family or working out. Do not bring your work at home since this can interfere with the time you need to spend with loved ones. If you work from home, you have to establish strict guidelines regarding when to work and when to do everything else.
One of the things that tend to waste a lot of time while working is distractions from social media. It is easy to get soaked into media platforms and lose focus on the task at hand. Though such platforms can help you with marketing, get someone who handles them on your behalf so that you can avoid getting distracted and losing track of time.
4- The lack of Understanding of Your Customers’ Needs
Whether you deliver a particular service or product, you should focus on fulfilling the specific needs of each customer. You can achieve this by keeping in touch with your clients after offering services to them. Collecting feedback from your customers helps you understand what they need and the specific areas you need to improve on. For instance, a client may like what you offer but suggest that you modify a particular feature. Paying attention to such details is what can set your business apart from your competitors.
You can also satisfy your customers better by keeping up with changing trends. Doing market research can help you remain updated on what is trending in your specific field. This can enable your business to continue staying relevant even as times change.
In a populated niche, your business can only stand out if you understand the challenges you are bound to face and equip yourself with the knowledge on how to overcome them. Though we have mentioned some of the common problems that startups face, you should explore more so that you prepare your business adequately.