The path of starting a small business is paved unevenly, with many pitfalls and obstacles to jump. Entrepreneurs are tasked with taking an idea from the early stages all the way through to sales, marketing, and delivering that product or service. Sound overwhelming? Sometimes it can be; that’s why we’ve put together this list of five of the most common challenges small business owners face, and how to prepare for them.
1. Budgeting
As Jerry Maguire so famously said, “Show me the money!” Launching a business can be capital-heavy, with money stresses becoming less immediate over time. When you start a new business, anticipate having enough saved to cover your initial bills, pay an employee or two, as well as some set aside to invest in infrastructure and services. One of the biggest mistakes entrepreneurs make is expecting immediate profit and not preparing for the cash flow problems associated with a business just getting off the ground. In fact, experts suggest you shouldn’t count on much profit within the first two years of getting off the ground.
What are some tips for taking this challenge on head first?
- Prepare, prepare, prepare! Have a plan in place for the worst case scenario, second worst case scenario, and even the best scenario, for luck.
- When you start your business, ensure that you have enough money to sustain yourself for at least two years.
- Be patient, success is never immediate.
2. Lack of Direction and Planning
A great idea is step one to becoming an entrepreneur, backed strongly by an iron will and a lot of patience. That initial idea can get you far, however, without a solid plan in place you may find your idea unraveling.
Before putting in capital, create a business plan, decide on a mission for your business, and set goals. The more proactive you are, the easier it is to avoid potential pitfalls. Plan your quarter. Plan your year. Heck, plan for three years! The key is to keep those plan flexible, as sticking too rigidly to plans can also be problematic. If you want to delight customers with an innovative product, you need to strike a balance between planning and flexibility.
3. Burnout and Fatigue
You know the saying, “If you want something done right, do it yourself?” Throw it out the window. Forget you ever heard it. It should say “If you want something done right, hire the right people and use the right tools.” If you’re hiring the wrong people and trying to do it all yourself, you’re probably well on your way to burning out. In fact, trying to go it alone is one of the biggest mistakes made by new business owners. As your workload grows, especially when you start becoming successful, trying to cope alone gets a whole lot more difficult.
How do you avoid this overworked fatigue?
Use the right tools. Automate whenever possible! Automation tools designed for small businesses will help you streamline processes. From sales to marketing, automation makes everything much more achievable, even on a budget. When automation isn’t the right choice, outsource. At Ruby Receptionists we do more than provide receptionist services, we help you build personal connections with your customers. You get the person-to-person connection and avoid having to hire someone full time!
4. Labor
You want to hire the right people, but the money for labor isn’t always there. As a new startup you’re destined to run into the challenge of finding and hiring the right labor, and deciding what to outsource. Every person and tool are vital to the success of your company.
There are three significant steps you can take to examine the labor you need for your business’s success:
- Review your current employment. Who have you hired? What do they provide to the company? What skills do you still need on your team to WOW your customers?
- Think about each area you need labor for. What’s the most profitable? Hiring or outsourcing?
- Set your standards and start looking for the right tools and employees!
Once you have an idea of where you are, you’ll better be able to make a strategic decision to ensure that you have the right balance of resources for your business. Don’t rush the process, as full-time employees are a significant cash investment. Be transparent when hiring about the stage of the business and the tasks you’d be expecting to delegate. The right hire will be energized at the prospect of growth and wearing multiple hats.
5. Balancing Quality and Growth
Sometimes growing happens fast—and what comes with growth? Growing pains. Growth in one area of the business could cause you to lose focus in another area, or a sudden influx of clients can cause you to lose the ability to maintain one on one relationships. If you focus too much on growth, you might let quality fall to the wayside, harming your relationships with your customers and your long-term success. If you focus too much on the quality you might miss out on the opportunity to expand your services and innovate.
You need to find common ground in between an obsessive focus on growth and an obsessive focus on perfection. It’s up to you to navigate your processes to provide quality and scalable service for your clients.
What are the main challenges facing your business?
