As an entrepreneur, preparing for whatever comes your way is significant. Unexpected challenges can come in many forms. If not handled properly, these can ruin your plan to build a successful business, and eventually lead to business failure. Below we discuss some of the most common challenges facing aspiring entrepreneurs today.
Developing your vision
Developing a business idea is usually the first challenge faced by every entrepreneur when preparing a business from scratch. Perceiving opportunities is just the beginning; the greater challenge is going to be the ability to construct that opportunity into a sound business model.
Influencing investors about something that doesn’t exist – or hasn’t yet blossomed – is definitely a challenge. There is more to raising capital than merely asking for money. A number of investors prefer investing in already established businesses with minimal risk. They want to be most certain about their ROIs for the risk they take. You will need a convincing, researched and executable business plan to persuade potential funders.
Gathering a team
The process of building a business team starts even before the issue of raising initial start-up capital arises. As an entrepreneur, you are bound to have strengths and weaknesses. As such, you need a robust business team to bring in essential skills, overlap strengths and eliminate weak points. Your strategic business team (whether full-time or strategic associations) should ideally comprise of a banker, financial advisor, an accountant, a legal advisor and any other specialist who will be of tremendous impact to your business. Figuring out how you will pay the team rises as another challenge. Or better yet, you can consider bringing them on board as partners where appropriate.
As a small business, the last thing you must do is hire employees that you cannot afford to keep. Hiring employees will however become a necessity when you have difficulties with your workload and you have the revenue to pay them. Your employees represent your business to customers and the outside world, reflecting your business’ culture and ethics, so hire with thought and proper screening.
Being competitive is a benchmark for creativity – the main engine that stimulates innovation and production of quality products and/or services, while offering great value. Competition keeps your business on its toes and drives you as an entrepreneur to constantly improve your service delivery. But competition can make your business lose its relevance in the eyes of your customers. It is thus crucial to always be aware of your competition and remain responsive in order to maintain your position.
Changes and trends
Fluctuations in trends present challenges you must be well prepared for when starting a small business. The ability to effectively respond to trends has helped build many businesses, while others that haven’t been sensitive to such changes have suffered immense losses. Keeping your eyes open to spot relevant trends is really a challenge, but the big task will be the ability to quickly use them to your advantage.
Exiting your business
When building a business from scratch, you are going to face the challenge of determining your exit strategy. Even if yours is simply a family succession plan, it is still in your interest to plan in advance. Most entrepreneurs run their business without any plan to exit and even if they have an exit strategy, poor planning means they find it difficult to implement.
Preparing to start a business is a big step for many entrepreneurs, but maintaining the enterprise until it yields sustainable fruit is a formidable task. Prepare yourself by being aware of the major challenges that lie ahead on the path to business success, and how to overcome or mitigate them.
Proudly brought to you by the National Small Business Chamber (NSBC).