In the contemporary competitive business environment, it is natural for entrepreneurs to face multiple challenges. You can expect to face difficulties in establishing your brand, keeping up or overtaking competition, and keeping your business profitable for as long
as you are in business. However, new entrepreneurs can expect to face some unique challenges that can be especially difficult to surmount. Some typical examples of challenges and advice on resolving them:
Deciding What to Sell
The most fundamental issue facing entrepreneurs is choosing what to sell because if they can get it right and pick out products and services that have a potentially high demand in the market, success becomes easier. When you are starting out, it is important to resist the temptation to cater to everyone and instead identify a niche that you can target with finely focused offerings. If you are unsure, then decide what you are good at and engage a consultant to help you to study the market potential and come up with a detailed project report that indicates possible market niches, a comprehensive SWOT analysis, revenue generation and profitability in the short-term and medium-term. Making the correct decision at this point in time can mean the difference between success and failure.
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Deciding on the Marketing Strategy
In today’s connected world, it is not mandatory for businesses to always have a brick and mortar presence. There are numerous ways of communicating with your target audience and affecting sales. If you are not very conversant about the merits and disadvantages of the print media, email marketing, social media marketing, web marketing or mobile advertising, you should seek out information on what your successful competitors are doing and try to find out what is perfect for you. Get on board a marketing expert who can help you to form a core marketing strategy, indicate the extent of investments, and act as a sounding board for all the ideas you generate.
Finding the Capital
There are countless stories of entrepreneurs having brilliant product ideas but not being able to bring them to the market simply because of lack of funds to set up the operations. Having adequate capital is essential for starting off the business and nurturing it in the early stages when typically, sales and profits are not likely to be self-sustaining for the business.
Perhaps the simplest way of funding your business is by dipping into your savings or asking your friends and family to help you out, however, to meet requirements that are more substantial you can explore credit card debt, crowdfunding, and after establishing a track record, banks and credit unions. It is always better to start small and try to delight your customers to build a reputation that will make the way forward easier than trying to start off with a bang.
Managing the Cash Flow
Proper cash flow management is essential for the business to survive and many entrepreneurs find themselves struggling to pay their staff, suppliers, and utilities or even make regular loan repayments even when the business is profitable. Cash flows can become unbalanced when you don’t raise your invoices on time and get compounded when customers do not pay within the credit period permitted. Delays in realizing payments can turn a business turtle because your suppliers or your staff will not regularly bear with you. Cash flow management depends on how well you can budget and plan.
You can ease the stress by limiting the credit period or requiring customers or distributors to make down payments or insisting on cash and carry transactions only. Requesting your suppliers for extended credit can also help to manage your expenses but you must first build credibility with them. You can also think of setting up a line of credit from a private lender like liberty lending that you can access when there’s a cash crunch you can’t work around.
Typically, entrepreneurs have to multitask quite a lot in the initial stages of the business, and often, they find time to be their most precious asset because there’s usually never enough of it to accomplish everything that needs to be done. It is only by smart planning that you can stretch the available time to get the maximum done. It is very important that you create a list of things that need to be done; else you will find that critical tasks have been missed out. Adopt a top-down approach by firming up
annual goals that you can then break down into monthly, weekly, and daily goals and tasks. Focus on the most critical ones and delegate the ones that you simply cannot afford to handle by yourself. Keep monitoring your time allocation so that you work more efficiently and productively.
As you expand your operations, one of the biggest challenges that you will face is hiring the right people who will take the business to greater heights. The hiring process can be quite lengthy and you will need to offer a competitive compensation package if you want to attract and retain the talent you really want. The best way of not wasting your time is to specifically define the profile, skill set, and qualifications, as well as the key result areas, the person will be responsible for. Advertisements for recruitment should be specific so that you end up looking at resumes that fit the bill.
When conducting the interviews, ask questions pertinent to the job profile and also attempt to know the applicant’s expectations and long-term goals. Be sure to check with references that count and make them an offer that is in line with both their experience and expectations. Be sure to explain your own expectations from them so that you lay the foundation of a mutually-beneficial relationship.
Entrepreneurship is all about facing and overcoming challenges. The only way you can hope to be successful is by working on a well-thought-out plan that is practical, conservative, as well as forward-looking. Your main assets will be clarity of thought and perseverance. You need to appreciate that you will not be able to address all the issues by yourself so you need to quickly build a team that shares with you the same dream.