5 Most Common Business Challenges
Small companies have to face a lot of challenges especially during the first few years of business. Both beginner and experienced entrepreneurs have to face challenges, the nature of such challenges is significantly different. Says the U.S. Chamber of Commerce, 80% of companies with fewer than 500 employees make it through Year 1, at the end of the second year, just 70% are still operating. By the time they hit the 5-year mark, just half of the small companies are still in business. For new entrepreneurs, some unique and most common challenges are choosing the right business, arranging the funding for a startup, dealing with a significant number of competitors, maintaining cash flow, finding customers, etc. arise. While experienced entrepreneurs’ challenges mostly on establishing a new brand or staying ahead in the league and making the business a significantly profitable one.
Let’s take a look at the most common pain points of small businesses. In addition, we explore solutions that will help you overcome these.
Having enough capital or cash to start up a business is one of the common issues of small business owners. There are so many ways you can get a source for capital to start up your business which includes these solutions;
Solution: Personal Loans / Savings / Family or Friends. If you have some money you have been saving, this is a good time to make your dream happen of becoming self-employed. Another is from loans; this could be from money lenders or from the bank. However, you must be careful and wise while negotiating so that your business doesn’t suffer in the long run. Last is borrowing money from family or friends. It’s also a good idea to borrow some funds from your close friend or family member who wouldn’t make you feel guilty as to when you are paying up. Both you and your friend should agree as clearly as possible if you are planning to start a business that might not gain profits immediately.
There are so many things you must put into consideration before you think of starting a business, like; What to produce, Proper Location, How to produce, and who you are producing for (Target Market).
Solution: You must take your time to decide what business you plan to start. The right business in the right place is always a good place to start things off. If there is competition in that particular market, then you must search for something that will make your business stand out.
As a business owner, you need to dedicate a lot of time to manage your cash flow. Knowing what’s your cash balance is at all times, and predict or project cash flow six months out. Having projections is a good way to prevent you from overspending and keep your finances in check.
Too Many Competitors
When you decide to start up a business, you realize that there are a lot of people doing the same thing. This is one of the common problems a small business encounters.
Solution: Once you get your chance, make sure you provide a good service to your clients in a manner they might have never seen before. Try bringing in something new or trendy in the market. Take your time to provide exceptional customer service.
For your business to be known, you must reach out to your customer base, only approach those people who show interest in your products or services. Sometimes, having the right product or service that could add value to their lives might not be enough to get you the right customers. If you want your products or services to be known you need to advertise properly.
Solution: You need to be strategic and creative on how you can attract new customers. If you do not have such a large capital, here are some options:
• Online Marketing
• Door to Door Campaign
• Email Marketing
• Social Media