Challenges New And Existing Entrepreneurs Face In Business – The entrepreneurship world is changing and entrepreneurship is becoming a new trend in many societies. The type of economic system practiced in most countries (capitalist and mixed economy) has made it possible for individuals to harness resources and engage in production of goods and services.
Many people due to this opportunity are drawn to leave working for someone else and being their own but this journey is not always smooth and easy. The truth here is that entrepreneurship is not for everybody. Not everybody can take the risk and also handle the challenges that come with being an entrepreneur or owing a business venture.
Whether new or existing entrepreneur, you are bound to face challenges at different points in your entrepreneurship journey. Most times, you would just feel like letting go.
So the question is:
- Are you an entrepreneur or you having the intention of becoming one?
- Are you ready for the battle ahead?
- Will you be able to stand and weather through the challenges that you may face in this journey?
Mind you, being an entrepreneur is not a get-rich-quick scheme and it is not an easy ride too.
Well, there no reason to fluster or dither. This article is here to expose you to the most common challenges new and existing entrepreneurs face and also we will be looking at some solutions to these challenges so as to give you knowledge of how to overcome those challenges when you face them.
We will be dividing these challenges into two categories:
- Most common challenges new or prospective entrepreneurs face
- Most common challenges existing entrepreneurs face
Read this article very well and ask yourself some questions at the end of the article.
So let’s get started…
MOST COMMON CHALLENGES THAT NEW ENTREPRENEURS FACE IN STARTING THEIR BUSINESS
Whether young or advanced in age, starting your own enterprise can be challenging and demanding too. The thought of quitting your corporate life, creating time and even getting the necessary resources for your entrepreneurship journey can be discouraging. Remember we said entrepreneurship is not for everybody; it takes a lot of courage and determination to start up and a lot of effort to continue thriving.
You don’t expect the journey to be smooth; do you?
Let us look at some challenges you will encounter as a new or prospective entrepreneur and also the solutions to overcome these challenges.
- Raising funds (capital)
Getting funds for your business is a major challenge that all entrepreneurs face and for the new entrepreneurs, it is really a troubling issue. As a prospective entrepreneur, you might not have the necessary resources to start up your business and also an adequate amount to fund it into success. You are starting from the scratch and sourcing for fund is not going to be easy peasy.
The first thing to do in starting up your business is creating a clear and realistic business plan. Your business plan should contain ways you intend to get fund for your business. There are different sources of funds; it could be from your personal savings, personal loans from family and friends, angel investors, venture capitalist or business loans from financial institutions.
Your business plan will clearly state the amount of capital needed to start the business and make sure you secure the capital you need to fund the business and meet the needs of the business.
Getting personal loans from family and friends is better for starting up as the interest rate is usually low.
You can also try getting a partner that is willing and ready to invest in the business.
- Letting go of your corporate life or career
This is the first step in your entrepreneurship journey. This is about quitting your corporate life of a consistent salary to start up your own business. Dedicating yourself to your business will entail letting go of your career or corporate life so as to have enough time to focus on starting and nurturing your business outfit.
Like we said that entrepreneurship is not for everybody and it only takes great courage and optimism to quit a job with a consistent salary for an uncertain venture that may either be successful or fail. It is really a huge hurdle to pass over because you have to look at this critically and understand the circumstances behind taking this risk.
Uncertainties are part of the journey of an entrepreneur that is the main reason entrepreneurship is not for everybody. If the outcome of venturing into a business is known and the probability of succeeding was one; everybody will become an entrepreneur and quit the corporate life.
You have to see uncertainties as a natural part of your entrepreneurship journey and to move forward and not wander; you have to embrace it but it should be after critical analysis.
You should always have a contingency plan. Having plan B, C, and also D; it will help you withstand any setback that comes with taking the step of leaving your job or career.
Be determine and do everything possible to excel and grow your business because in quitting your job; it becomes clear that your life depends on the success of your business enterprise.
- Generating ideas and having a vision
Many prospective entrepreneurs find it difficult to come up with ideas or goals to pursue and so they end up doing everything and achieving nothing. They lack creativity and inspiration which is one of the qualities of an entrepreneur. This vision or goal will help direct your focus and energy towards what you want to do. The lack of ideas and clear vision makes it impossible for you to make concrete decisions on what to do and how to go about it.
Generating ideas can be difficult and tricky and it takes a lot of creativity to do that. In trying to generate ideas for your business or to start up your business; you have to identify the problems of the people around you and try to analyze possible ways of solving these problems. The problems you identify are business opportunities and thinking of ways to solve these problems will help to generate ideas and give you a clear vision.
This ideas will help you understand why you need to become an entrepreneur and help you in mapping out a plan to turning your ideas into a reality.
- Managing time wisely and prioritizing
Many people are misled that entrepreneurs have enough time unlike those working as employees. While entrepreneurs argue that they do not have enough time as they sometimes wish for longer hours in a day and longer days in a week.
But the truth still remains that time is a valuable resource that needs to be used wisely. Managing time wisely will help you know your priorities and stick to them. Many entrepreneurs try to do everything or even multitask and in the end productivity and efficiency will be lowered.
There is just enough time to focus on your business if you use time wisely and effectively. Time management is a skill to be mastered by entrepreneurs so as to succeed.
You have to know and understand your priorities (know what is truly important). Knowing what is truly important will help you focus your time and resources on them.
Starting your business can be time consuming as you have to dedicate enough time and effort towards the business but know that in doing this; you have to have a schedule or to-do-list of your daily activities so as to arrange them in an order of priorities. This list will help you in accomplishing your daily task which is geared towards the success of your business.
You cannot do everything at the same time so it is important you prioritize so you will not end up wasting time on irrelevant or less important task.
Setting your plan according to the identified problems and generated ideas will guide you in prioritizing and managing time well.
- Understanding your product market and target customers
Starting your own business is not an easy route let’s be frank here. Many entrepreneurs face challenges when it comes to knowing their target market and also their target customers. Your inability to identify your target consumers will make it impossible to reach them and also gain a foothold in the market. The questions here are:
- Who are your target consumers?
- How can you reach your target consumers?
Your inability to answer the above questions will make you unable to create a thriving business that will add value. Every business needs to be channeled towards satisfying the needs and demands of consumers. Before you venture into a particular business, you have to understand why you are venturing into that business.
You have to understand the basic problems that will prompt you to produce. The basic economic problems are: what to produce, how to produce and for whom to produce.
Identifying the problems of your target customers and developing a suitable way to meet or solve these problems will help you in create successful business. A successful business is one that is geared at solving or meeting the needs and demands of customers.
Knowing your target consumers and understanding the market for your product after conducting a market research will help you know how to reach them. The internet has also made it easier to reach your target customers or consumers in little time and faster too.
- Building a team
This can be very taxing and challenging. How do you go about building a team of trusted and competent workers? It could be employees; it could also be partners as a start-up entrepreneur. The team you have play a major role in the success of your enterprise. It is overwhelming trying to hire the right set of individuals for your business and also being responsible for someone else’s welfare and livelihood.
Having a capable team and employees that are creative will help you in establishing a successful business outfit. This is one challenge most new entrepreneurs face. Well let’s look at the solution below.
A good business will definitely attract capable and competent hands. You should develop a business that attracts and promote the qualities you want. Your business should have a clear vision and stand for that vision so as to attract the right employees and even after hire; they will still give in their very best to the success of the business.
Also, try hiring people that have the same passion as you; people that are motivated by what you have created and want to put in their best. Their passion will create a form of loyalty in them.
If you have enough funds, using the services of an HR expert or manager will help you in getting the best hands for the job.
In some cases, though not always recommended, the services of family and friends can be employed provided they have the same passion and also the potentials to drive the business to success.
- Dealing with the hunger for success
One of the myths of entrepreneurship is that entrepreneurs are always profit oriented. Well, this is true though to an extent. Most prospective entrepreneurs are so eager for success that they grow impatient of the slow growth of the business. You don’t expect your business to become successful in just a year or two after establishment or launching. Setbacks are bound to arise and these setbacks can cause you to be so impatient.
Most times, you tend to try different strategies because you feel that they are not giving you your desired result. I understand how you feel after investing time, effort and resources to your business and nothing tangible comes out of it; your level of impatience will grow and mind you this could spell doom for your business. Your hunger for success needs to be put under control.
You should always put or bear it in mind before starting up your business that establishing one take time and know that you are bound to encounter challenges. You should try to enjoy your journey to success and embrace every process that comes with it.
You should learn to see failure as a stepping stone to success and also learn from failure.
In dealing with your impatience, try to take smaller steps and smaller risk towards achieving your goals but in taking these small steps, be smart and take calculated risk. Every process is an added experience to you both in your business and as a person.
- Creating a clear business plan
Having a clear business plan is a pathway to creating a successful and thriving enterprise. Many prospective entrepreneurs encounter challenges when it comes to setting out their business plan. They do not have a clear goal so it becomes difficult to create or write out a business plan that is clear and realistic. Your business plan is a road map that shows you where you are and where you want to be. As a prospective entrepreneur, you should create a clear and realistic business plan.
Let’s look the solutions to overcome this challenge.
In setting out your business plan, you should state out a problem to be solved as this will give you a direction and a point of focus. Your business plan should not be about doing many things; it should be about doing one thing perfectly.
Conduct a market research to know the problems, needs and demand of your target customers so as to channel your production towards solving that problem. This will help you set out a clear and realistic business plan.
Try to be consistent with your target market and target customers. When you understand your target market very well, you would be able to write out a clear and précised business plan.
MOST COMMON CHALLENGES EXISTING ENTREPRENEURS FACE
When we say existing entrepreneurs, we talk about those entrepreneurs that have already started their business enterprise. As prospective entrepreneurs encounter problems in the start-up of their business, so do existing entrepreneurs encounter problems in running their business. These challenges could be in different forms; funds, employees, management, decision making and so on.
These challenges could limit the growth of your enterprise. So we will be looking at some of the most common challenges that you face when you are already in business and we will also be highlighting the solutions to help you overcome these challenges.
- Managing the flow of cash in your business
Most entrepreneurs have problem with managing cash; they find it difficult to keep account of cash transactions in their business and how they spend cash. Many also make the mistake of keeping business fund and personal funds in one account especially as a sole proprietor.
If you don’t know how to manage the flow of cash in your business, you are bringing your business closer to failure and bankruptcy.
Learn to create clear and specific boundaries between your business funds and personal funds. It is true that both funds are yours but remember that business funds which could be profit of the business could be ploughed back into the business so as to enable expansion and growth of the business. So have separate accounts for personal funds and business funds.
As an entrepreneur, you should also have an account book to record transactions on daily, weekly, monthly and also yearly basis. This will help keep track of cash flow in your business and also the progress of the business.
Try having insurance as this will help you cover up for some losses you might encounter in your business due to some risk taken.
- Fluctuating income
Most people see entrepreneurship as an avenue to get rich quick but the irony is that in running your business, you are likely to have fluctuating or inconsistent income. You have some days where income will be high and some other days, you generate low income. This is one advantage an employee with a consistent salary has over an entrepreneur.
This inconsistent income can get you frustrated especially when you have corresponding expenses. You will find it hard to create a budget and in most cases, it will encroach into your personal funds.
Your fluctuating income shouldn’t stop you from budgeting as you can do this by setting an estimated income and estimated expenses for the month but bear it in mind that you should try to be meticulous in estimating your income. Try estimating your income from analyzing the income from the last 6months. Set a range and use that as a yardstick to prepare your budget.
In a fluctuating income situation, you will have some days where your income will be good try saving up so as to meet up with the bad days. This will also help you cater for expenses.
- Spending money
Do you have a problem of spending money? Do you encounter issues of high expenses?
Well, most entrepreneurs face problem of having expenses that exceeds their income and this le3ads to deficit and running on debts. Mind you, debts are bad for business.
You try to create a thriving business and in the process, you spend money on irrelevant items.
Like we said earlier, learn to set clear boundaries between your personal funds and business funds. In doing this, you will set out a boundary between your personal expenses and business expenses.
In budgeting, make sure your expenses do not exceed your income. Try to prioritize your expenses; that is, using the scale of preference approach especially when you are on an inconsistent income. Arrange your expenses according to how pressing they are and do not spend on irrelevant items.
You should also avoid impulse buying. Impulse buying leads to wastage so analyze the importance of items or equipment before getting them.
- Managing a team
Your team could be your employees or even partners. In your entrepreneurship journey, you will definitely need help at some point. You get to meet people from a different background as yours and also with different attitudes, skills and temperament. You also get to be responsible for their safety, insurance and livelihood. This is a huge task to handle.
Humans are really difficult to manage and control. All these burdens rest on your shoulders as an entrepreneur. The question is what do you do?
Managing people can be difficult and if you do not do it well, it will surely affect your business. Try hiring employees that have the same passion you have for the business and not those that are solely after the salary they get. For employees that have passion for what they do tend to give in their very best for the growth of the business.
You should also try delegating responsibilities. It is true that the business is yours but you should not also be a control freak even though you are saddled with the responsibility of making decisions. You should sometimes throw it open and get the opinion of your employees and seek their inputs. This will boost their creativity and zeal to assist in any way they can.
You should also try relating with your employees and in most cases, try to know about their families and personal life; it helps you relate with them well.
- Finding customers and keeping them
Many entrepreneurs or business owners complain about finding customers and also keeping or retaining them. These two are different. The former means getting customers to patronize your business while the latter means getting these customers to be loyal and stay, that is, continue patronizing your business.
Dealing with customers can be difficult because they make it seem like they are doing you a favour patronizing your business. Well this is true to an extent. What do we do about this? How do we get customers and retain them?
This all lies in your marketing strategy and market concept. One secret to running a successful business is making your business outfit “consumer oriented”. The customer is always right and should be treated as “kings”. It is good to direct your business towards solving a problem and meeting a need or demand. This way you tend to get customers to shift their attention to your product.
You should try to be creative and innovative. Generate ideas and also try to implement them. Conduct market research regularly so as to know the market situation of your product and that of competitors and also try to know the new trends and taste of the customers or consumers.
This will help you in solving the problem of what to produce and for whom to produce and also standing out in the market.
You should always do more than your customers or consumers expect. This will surely make them come back for more. You should not only be after meeting their demands or needs; try creating demand with your innovation.
You should be able to talk to people, persuade and convince them to patronize your product and brand.
- Handling failures and setbacks
Do you think your business will thrive smoothly? Do you think every day would be a bed of rose? Well, if you think you won’t encounter problems in running your business, you are living a fantasy. No matter the plan you have mapped out; no matter the things you have put in place or the amount of capital you have invested into your business, you will surely encounter setbacks at some point.
There would come a time when things won’t be working out as planned. It could be in form of lack of funds, inconsistent income, lack of customers or even employees headache.
Let us look at some solutions to the problem of setbacks.
Failures or setbacks are part of the growth process and the success journey. When you encounter setbacks, learn from them and move on. When you encounter setbacks, critically look at why the problem occurred and try to analyze what you didn’t do right or what you have not been doing right.
You shouldn’t start beating up yourself over failure; it is an avenue to try something else and something better. That is why it is advisable to have contingency plans aside your initial plan so as to help you weather through moments of setbacks. In creating your business plan, anticipate setbacks you might encounter and also the solutions to those setbacks.
Focus on your strengths and not your weaknesses and set your enterprise to play towards your strength. This will give you an advantage over competition.
Failures are temporary setbacks that help you to put in more effort so as to improve and do better. Therefore, when you fail in running your business, try to learn from the failure and come back stronger and better.
In summary, we have highlighted the most common challenges both new and existing entrepreneurs face in their business. Whether you are an entrepreneur or aspiring to be one, you should go through this article thoroughly and look at the solutions to the problems or challenges we have highlighted.
You should ask yourself if you are ready for what it takes to be an entrepreneur, the sleepless nights and hours of hard work.