5 Things Entrepreneurs Must Overcome in their business
You may have chosen to start a business for any number of reasons - an idea sparking in your mind, a change of pace or the need for work. However, like every big decision there comes risks and challenges which could get in the way of your dream. Don't despair though, we've compiled this list in order to help you navigate your way through.
1. Not having the funding available
This problem is more common than you think. You've got an idea and you want to get moving with it, but there's no money there. You've probably found that banks are not as willing to lend money to start-ups as they once were, unless you have the savings to match the funding, which can leave you struggling to get off the ground.
One option you could look at is crowdfunding. As we've looked at in a previous post, crowdfunding is a method of raising capital through the efforts of friends, family, customers and other individuals, and can allow a greater reach to find potential investors.
However, if crowdfunding isn't right for your business then you can look at more traditional methods of funding. This is something that your local authority may be able to help you with in terms of grants or loans.
What money is in the business, and what you manage to source, may need to go a long way before you start seeing a return on it. This could mean that you need to carefully manage your finances in order to make it work. A strong understanding of your cashflow can go a long way. Also, remember that when you start to see money coming in that it may be a while before it becomes more regular and you may have bills coming in at the same time, or not long after. So make sure you have a reserve of cash that you can call on if the going gets tough.
2. Not having the time
Once you've started your business you may feel as though there are other things getting in the way of your ambitions. Such as a family to take care of, household bills to pay or another job which is keeping you going.
Overcoming time factors such as these can be tricky, but it is possible. Organisation is key, having things like timesheets and to-do lists can really help you manage your time and what needs to be done by when. A good starting point is to give yourself a task to complete by the end of the week, for example, writing a business plan. Then throughout the week that is your only goal within the business, you may find that as time goes on you will be able to make other, larger goals and still get them done.
3. Having the right support
At some time or another we've all looked at other successful people and wondered how they got there before coming to the conclusion It's not what you know, it's who you know", and no matter how much you try to avoid it, when it comes to business, this is true. A good starting point is to go out and meet people, get those connections in place.
There are plenty of networking events out there, all you have to do is take a look online and sign up to them (you may also find that a lot of them are free, which can help with your cashflow). Once your name is out there and you've met some connections you may find that some of them are useful, such as someone starting a similar business to yours who can become your partner, a local big business owner who may block your access to market or a person looking to buy what you're selling. All of these connections are vital and can help you understand how your business needs to function in order for you to get ahead of the competition.
4. Not having the right structure in place
Before you go too far in business, it's a good idea to figure out what type of business you will be. The different business structures can mean different liabilities for the owners.
If you decide to incorporate and become a limited company then there is less responsibility on you as you are separate from the business (unless there is proof of fraud). It's also worth bearing in mind who will have a say in the business; a limited company would allow you to allocate shares which sets out what voting rights everyone has and can make decision making easier. In some cases, people would feel more confident trading with a limited company than an individual due to the legal framework behind it (being incorporated by Companies House for example).
However, a limited company does come with its downsides too. Companies are taxed, at the time of writing, at least 20% on their profits.
We covered some of the pros and cons of the various legal structures in a previous blog post, What are the Different Legal Structures in Business?.
5. Lack of Marketing Experience
Marketing can be a key thing for any business - the right message can really draw in the clients you need, while the wrong one could spell disaster. It's not uncommon for small businesses to think of marketing as wasted money, but it can be a good idea to spend some time with a marketing professional to ensure your business is portrayed the way it should be.
Even if your budget doesn't stretch as far as hiring a professional to do this for you, there are some affordable ways you can shout about your business, including social media, blogging and email lists. We take a deeper look at these in a previous post, Marketing on a small budget.
Wrapping it up
Whenever you think that something is against you - time, money or experience - just remember that everyone started somewhere. Knowing the right people can really help push the business in the right direction, as can spending a bit of time (and in some cases, money) to help secure the right resources.
- 30 Jun 2020 - Using Cashflow Forecasts for Small Businesses
- 28 May 2020 - Starting a Business During the Coronavirus Lockdown
- 30 Apr 2020 - Staying Connected During Lockdown
- 24 Apr 2020 - Weathering the Storm for Small Businesses
- 31 Mar 2020 - Keeping the Right Clients