The 4 Biggest Challenges to Starting a Business (and How to Overcome Them)
The first emotion when we start a business is – Excitement!
After all, entrepreneurship is a thrilling affair of riding our own success wave.
Often, we forget that owning a business comes with its own challenges.
While some tasks are easily overcome, others will affect you for the rest of your entrepreneurship journey.
Let’s look at some newbie obstacles that every new entrepreneur faces when starting a company.
THE TOP 4 ENORMOUS CHALLENGES THAT BRAND-NEW ENTREPRENEURS FACE
You’ve probably heard tales from the crypt of entrepreneurs that faced bankruptcy and lost their entire fortune overnight due to personal negligence.
These stories wake you in a pool of sweat with depraved thoughts on how you’d find yourself in the rubble too.
The good news is many of the founders that have filed for bankruptcy have found their ladder of success and bounced back from it.
However, the bad news is this ladder of success is hidden behind a veil of fog that requires
- An organized brain
- A creative mindset
- A focused vision
All of which are attainable if you find out the biggest challenges that plague new entrepreneurs and solve them.
Without further ado, let’s look at some of the top issues faced by new entrepreneurs along with their solutions.
1. Time Management with a Day Job
Imagine driving a car with one hand while browsing your smartphone with the other. You’re bound to crash regardless of your exceptional driving skills.
We aren’t saying it’s impossible to work a regular job along with your business but dividing your focus between the two fields is always problematic.
While most entrepreneurs previously worked as an employee, they still had a plan before permanently shifting over to their business.
Assuming you work 9-5 every day, you’ll feel exhausted to work on your business idea when you get back home. A tired mind is a bad start to a brainstorming session.
A business requires your complete attention and undivided focus. It’s not a hobby and it can’t be treated as a side income.
Another issue that you’re likely to face is getting caught during your work time daydreaming about business ideas, you’ll likely be fired.
While a side business is a good idea to spend time and a few late-nighters, it’s not going to lead you to your entrepreneurial dream.
All the Elon Musks and Steve Jobs in the world didn’t build their multi-billion-dollar businesses while having side jobs.
It takes commitment.
And most importantly, it takes sacrifice.
Entrepreneurship is a risky business. Without a starting capital, your business is going to explode in the first few months. Quitting your job leaves you with no option to pay your bills.
It’s smart to save a portion of your salary as a business fund. In the meantime, develop the business plans and the associated resources required to gather your entrepreneurial dream.
For example – if it takes $10,000 to run your business for a year. It’s a good idea to set aside $20,000 of savings as business capital to run your business for 2 years without any outside financial aid.
The next step is to map out your yearly expenses – this includes food, rent, and personal expenses.
Calculate the amount required to live stress-free for 2 years.
Let’s assume the number is $20,000.
Add the business capital and your personal expenses.
20,000 + 20,000 = 40,000.
And $40,000 is the magic number to aim for.
When your savings reach this number, it’s important to follow the below ruleset, before quitting your job.
- Don’t venture into a business unless you’ve performed your research.
- Spend time with leading experts in your preferred entrepreneurship industry to understand the success rate of your venture.
- Don’t juggle your business work on your company’s work time, it’s unethical and if you get caught, you’ll find yourself out of work.
- A business idea is likely to thrive with additional support, get the help of your colleagues and managers to pool in the capital.
- Just because you have an idea, doesn’t make it a good one. Understanding demand and maintaining supply are key to success.
2. Difficult Hiring Process
If you thought job candidates had it hard during an interview session, wait till you switch to the other side of the interview table.
One of the biggest foundations of an excellent business idea is the person you hire to take your dream forward. Sifting through all the underqualified ranks of prospects can suck your precious energy dry.
Employees are the bread and butter of every company. They represent your company’s culture and you’ll be spending your professional life with this elite bunch.
Finding hardworking and success-hungry individuals isn’t easy, it takes plenty of interview sessions to narrow down the valuable candidates.
Most entrepreneurs are unable to differentiate between a good candidate and a bad one during their recruiting process. They don’t allocate additional capital to recruit an HR manager during phase one of their business plan.
Transferring your business strategy to your team of workers is essential to get things right.
Here are the best practices on how to recruit coworkers that understand your company’s mission statement and get it right.
It’s important to know exactly who you’d like to hire beforehand. You don’t want to make room for employees between the hiring process or hire as you go.
This is a bad way to recruit.
Make a list of all the necessary recruits. This could be –
- An accountant or a financial advisor
- A creative head with 2-3 junior team members
- An advertising manager with a team
- A maintenance crew
- Operational managers
Depending on how many crew members you’d like, it’s important to begin recruiting the senior level posts before you start with the freshmen.
This is because the senior-level team members can offer advice on what they’d require to work efficiently.
- Keep your job ads laser-focused so you attract only professionals
- List down every bit of detail of the job description to save yourself copious amounts of interview time
- Face-to-face interviews are always preferred over others
- References are only good if they come from someone you trust in your professional circle – a colleague, a mentor, etc.
- When shortlisting, ensure they meet your work demands by matching it up to their past accomplishments
- Demonstrate how you reward their hard work through an incentive plan, this lets them give their best work forward
Before the world knew Steve Jobs as a charismatic and brilliant innovator, his employees at Apple knew Steve as a tyrant.
Were his strong methods for perfection and attention-to-detail wrong?
Well, Apple wouldn’t be at its innovative best today if it weren’t for his intimidating reign.
For optimum results, Steve Jobs required all his employees to possess the following qualities.
- Ability to deliver on deadlines
- Sacrifice personal time
- Focused on the current goal
- Zero vanity
- Aggressively passionate
Chances are when you hire, you won’t be as intimidating as Mr. Jobs, the lesson still stands – the following qualities are what you should expect from your employees as well.
3. Lack of Creativity
No! An entrepreneur’s job isn’t managing the workforce, that’s what managers are hired for.
An entrepreneur needs a clear vision to take their business forward. Creative thinking is a necessary skill that every entrepreneur must possess.
Among the biggest challenges of starting a business, an entrepreneur is likely to hit a roadblock where all their creative juices cease to flow. Similar, to a writer’s block for writers.
This will be the biggest difference between a successful entrepreneur versus a mediocre one.
Ask yourself the following questions.
- Are you prepared to take on a financial loss?
- Are you comfortable with constant change to deliver quality?
- Do you see yourself changing your mission statement frequently?
- Do you have the right task force assigned to perform their jobs?
- Are all elements of risks covered?
- Is your business using the best practices used by your competitors?
- Are you tracking new competitors in your industry?
- What was the last successful gameplan that you launched?
- What affected your company’s profits and losses the most?
- Do you have a response plan for the changing trends of society?
An entrepreneur who has the answers to such questions is ready for the big business game.
If you are an entrepreneur that doesn’t stop and think and doesn’t have the luxury of time. You’ll most definitely fail.
Some of the most innovative products that have launched globally took years of patience and development.
While swift product development and meeting deadlines is a must. A courageous leader is always ready to delay the product launch in favor of getting it right.
Creativity is contagious. Pass it on. – Albert Einstein
Albert Einstein’s words about creativity are something every entrepreneur must hang on a board in the workplace. Instilling creativity among your workforce allows them to think of new ideas to innovate the business.
If 1 mind can do wonders, imagine the power of 100 creative minds?
We’ve compiled a list of ways to improve your inner creativity before starting your business.
1. Group Discussion/Brainstorming
It doesn’t matter if you’re an introvert. A business requires teamwork and without input from other sources, your business begins with a dozen mistakes you haven’t considered.
Having people offer their input is incredibly valuable. Every opinion shouldn’t be accounted for. It’s up to you whether to implement their ideas or not. But hear everyone out.
Schedule meetings with creative leaders in your field. Perform interviews and reach out to their success stories. Every story has valuable information that enlightens you on your entrepreneurial journey.
2. Long-term Vision
Creativity and longevity go hand in hand. No creative person ever develops a short-term plan and shuts out the future.
For every directed effort towards your long-term goal, you’ll be rewarded with experience and knowledge.
Having knowledge of what you want at the end of your business career helps in creating immediate goals to achieve it.
If it’s one thing that all creative minds do together, it’s enduring the rants and negative criticism of their peers, customers, and coworkers.
A plan doesn’t immediately become clear to everyone. The others don’t have the necessary information on how your plan begins and ends.
Only you have this precious information. And when you set out to achieve a plan, stand by it even if the entire world is against you.
If you’ve evaluated and researched it thoroughly, then rest assured, time is your only enemy.
Don’t believe us? Check out these top entrepreneurs who trusted their gut over the opinion of others.
Is it possible to get your best ideas when you’re stuck in a 5-hour traffic jam with honking cars all around you?
Of course, not. The mind works best when it’s calm.
And the best way to access calmness is by meditating and slowing everything around you.
Creativity is reached when you have perspective and inner focus about yourself. Meditation provides you with the required clarity to understand and review the decisions you’ve made.
Set aside 10-20 minutes every day for creative thinking.
Spend this time in quiet meditation with some relaxing music. With your eyes closed, visualize your business goals, decisions, and create a mental roadmap.
Daily visualization helps you create a routine and never lose focus on your mission.
4. Budget Allocation
Do I mortgage my house to fund my business capital?
Do I have an emergency fund to reach out to during a financial crash?
Are credit cards a valid source to reach out to during a strapped budget?
Many thoughts make their way into the minds of solopreneurs.
After all, allocating funds is a big deal when starting a business.
Seasoned entrepreneurs have the luxury of taking risks with their capital. It’s not the same when you have no other ways to acquire capital apart from allocating them wisely.
One mistake new entrepreneurs make is having the same banking account for both their personal and business requirements.
Here are the reasons this is a bad idea.
- No way to track your business expenditure
- A complete mess when you conduct accounting for your business
- Overlapping personal and business expenses cause confusion in your balance sheets
- No ideal way to secure business loans due to unclear transaction figures
- Ability to spend business capital on personal use without knowledge
- Tax Issues with the IRS
- Poor credit score
The list is long but you get the idea of why a business account should isolate itself from your personal one.
Another mistake new entrepreneurs make at the beginning of the business is to make large purchases without thought. Such as –
An automatic coffee maker with multi-funnel processing. A state-of-the-art printer that produces over 20 sheets in less than a minute.
While these may look like valid purchases, in time you’ll realize these decisions are a setback on your overall business progress.
New entrepreneurs are also travel-crazy, every small accomplishment leads to parties and organized trips for your team. All of which dwindles your budget.
Paid software is another financial dump to avoid. Plenty of software perform your work for free if you spend the time to research them.
Hiring staff that aren’t required on monthly payments is another blunder that budding entrepreneurs make.
How do you escape from all these serious financial grievances?
Well, at Cleverism, we’ve compiled a checklist to follow when allocating budgets. This should minimize any excessive spending.
- Mortgaging your home to fund a business idea is detrimental. Don’t attempt it.
- Maintain a business checking account and a personal expenses account.
- Credit cards are not a revenue stream. Treat it as a loan from the bank.
- Every business must have a contingency fund to fall back on. A minimum 1-year fund to run your business if things go south.
- Prevent hiring staff for every job role. Utilize freelancing services to get work outsourced to professionals and pay by the hour to save up on monthly wages.
- Strictly avoid celebrating small victories and save the lavish parties for when your business has reaped profits and can afford one.
- Basic electronics or used electronics are a great way to save money when setting up your workplace.
- Be frugal in the beginning. Budget allocation during the initial phase must be contained.
- A financial blueprint helps with budget allocation in the beginning. Create one and stick to it.
- Track every expense and monitor your budget daily. It’s easy to lose track and end up with no cash flow when you don’t pay attention.
- Maintain an accountant to track all your taxes. Your accountant should also provide you with financial advice.
Imagine being overweight and asked to run a 10K marathon on your first day of exercise? It’s physically exhausting, and it will leave you with painful joints.
Starting a business is no different. Don’t try and solve every challenge on the first day, it’s impossible. Chances are you’ll create new ones while tackling all at once.
Every business challenge needs to be addressed with a routine.
While your business will never run short of problems, you’ll be much more experienced to tackle new issues as they arise.
What were the 3 biggest problems that you faced or currently face with your business? Share with us in the comments below. We are all ears.
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