Entrepreneurship is not an easy job. Entrepreneur’s face multiple challenges in their daily business life. Modern business worlds are ultra-competitive.
While there are various tools and resources for business managers to simplify their work lives and manage their organizational goals, the challenges still exist.
Following is our list of top 10 entrepreneur challenges and their solutions.
1. Managing the cash flow
Cash flow is the backbone of small business ventures. However, managing smooth cash flow is a constant struggle and one of the biggest entrepreneur challenges.
Cheques can arrive late, invoices can get delayed, and failed transactions are a common occurrences.
While you’re sure that your money will arrive, you still need to pay your bills in the waiting period. From giving salaries to the employees to paying the building rent, electricity bills, internet charges, mortgage bills, etc, need to be paid off on time.
You can not really wait for the contractors to send off their due payments to pay off your own bills. And when you come across customers who don’t pay, things can get tougher.
So how do you really ensure smooth cash flow through your business life cycle?
Following are some practical solutions to the cash flow problems faced by entrepreneurs:
- Options like asking for a down payment (along with the profit margin) or perhaps a percentage of the bill as a down payment is a safe option to move ahead. You have the money in hand which makes the equations easier.
- However, a good number of clients hesitate to agree on down payment terms. In such cases, faster invoice timings can be planned. For example, if your typical billing cycle of 30 days leaves you struggling with cash flow, plan to set up a billing cycle of 15 days instead.
- Shorter invoice periods give you a couple of week’s margins, in cases of delayed payments to collect the cash and still be able to pay your own expenses on time.
- Asking for immediate online payments on delivery of a product or service is another good option.
- Consider asking your own vendors to increase your invoicing period from one month to say, two months. This will allow you ample time to collect your own payments and pay your vendors on time.
- Choose your clients carefully. Long working relationships are essential in business. It is important that you choose to work with clients who value punctuality and other work ethics just like you do.
2. Time management
Time management is another big one amongst entrepreneur challenges. Especially for business managers who need to multitask various activities to get through their work day.
In business, time is money.
So how do you manage time effectively so as to get things done before their due dates?
Smart management is the only solution for that. Here are some key points to consider:
- Break down your goals into smaller goals. Annual goals, monthly goals and perhaps weekly goals too. Further, create lists for your daily tasks. Once you stick to managing the daily goals on your list, your weekly, monthly and annual goals are automatically sorted.
- Eliminate the tasks that are not in sync with your goals.
- Consider the priority of each task
- Learn to delegate
- Various business organization management tools like Trello, Zapier, Google Calendar, etc are available for managing your daily activities. A good number of them are free while others are paid. They’re easy to use and super efficient in managing your daily work chaos.
3. Choosing a niche
Choosing a profitable business niche is essential to taste success. Niching down is an entrepreneur challenge that needs serious consideration and time.
You know the market that you want to target but understanding the niches available within the market but it is all about targeting the most profitable one.
So what’s the solution? How do you identify a great niche? The following checklist might offer you some great solutions:
- Delegate the task to someone (family member, friend, freelance researcher or business friend) who has a strong understanding of your chosen market.
- If you’re doing it yourself, conduct thorough market research to understand the customers, demographics, needs, gaps in delivery, competitors, etc.
- Conduct a SWOT analysis
4. Defining a marketing strategy
Great marketing strategies build great businesses. However, entrepreneurs, being new in the business don’t really know the best strategies to market their goods and services.
Targeting the right customers, studying the competition, preparing a business plan, choosing the best marketing platforms, etc is something that needs expertise.
So how do you get through this essential step if you’re not really adept with the world of marketing and advertising? Consider the following solutions to get your marketing strategy in place:
- Outsource the job to a marketing specialist. Let them work with you to create a marketing plan in accordance with your budget availability.
- Ask your marketing strategist to study your organization goals and create a marketing plan that is in sync with it.
5. Look out for the initial funding
How to get the capital to start or grow your business is one of the key entrepreneur challenges.
Following are some solutions used by business owners across the globe:
- Bank Loans
- Capital funding companies
- Merchant cash advances
- Be proactive in your lookout for paying customers and ask for advance payments
6. Employee hiring process
Hiring the right employees who add value to the organization is one of the most dreaded entrepreneur challenges. Hiring is a lengthy process. Form posting about the vacancies to getting resumes, reviewing them, interviewing and selecting the right candidates, the process is definitely tough on entrepreneurs.
So how do you get to uncomplicate the process and make it less consuming on your time and efforts? Here are our key tips to follow through the hiring process:
- Be exclusive with your ads. Make your requirements as specific as you can. This may lower the number of resumes that you’re likely to get but it will improve the quality that comes through. Plus, you’ll save on the time taken to select the ideal candidate
- You could offer the candidates probation at a smaller wage and choose your ideal candidates/employees amongst the trainees.
- Treat your prospective employees as a partner and look out for those qualities.
- Seek references. Rather, start your search through real references. This would save you the time spent on the entire hiring process while still getting good prospects.
- Ask the candidates to be honest about their expectations and reach out to meet what you can. You don’t want to spend your time and effort in finding an ideal candidate and then seeing them move on in a few months (leaving you in a vicious circle of hiring)
- Make the expectations clear for both parties and create a foundation for a long term relationship.
7. Managing tasks
Messing up when managing tasks or even while delegating the is not uncommon to business managers. Keeping track of tasks, managing them efficiently to meet schedules is one of the biggest entrepreneur challenges.
Following are some tips for effective task management:
- Delegate the tasks based on employee qualifications and expertise. Understand the key strengths of each employee and give them tasks accordingly.
- Outsource the tasks when your in house staff cannot manage certain areas. This will save on your time and get you the desired results on time.
- Break down the tasks into subtasks and list down each small activity, being as detailed as possible. Make sure that your employees understand each and every activity within the task.
- Create spreadsheets for defining tasks and subtasks along with their timelines.
- Use online management tools like Trello, Google Drive, etc to share the work within the team and manage tasks more effectively.
- Take help of latest gamification techniques (like rewards, points, etc) to motivate your employees for task completion.
8. Competitor challenges
If you’re in business, having competitors in natural.
And when you have competitor organizations, challenges within the market are bound to occur. Dealing with some of these challenges like keeping your client list intact, pricing etc gets very challenging.
Following tips help to get through this entrepreneur challenge:
- Study your competitors well, even before entering the market.
- Niche down your products and services in order to reduce competition within the market.
- Excel in the quality of products and services that you provide.
- Keep a close and personalized relationship with your consumers as well as vendors.
9. Advertising your brand
Creating a branding strategy is not just about setting up a business but also making it reach out to the target audience. In modern times, this calls for choosing a suitable social media platform to advertise your brand name.
However, selecting an appropriate platform may not always be easy. Consider the following tips when advertising your brand:
- Outsource the job to a social media marketing expert.
- Choose a platform that is most visited by your target audience.
- Create interactive features to build communication channels with your consumers.
- Use modern marketing techniques like offering gifts, vouchers, etc as promotional takeaways featuring your brand name.
10. Lack of confidence
Nothing kills a business curve as a lack of confidence. Even the brightest of startup ideas fail without sufficient confidence. It is easy to feel discouraged with the constant roadblocks and challenges.
Self- doubt can often creep in at such times. Consider the following solutions when you’re faced with a similar situation:
- Have a good support system- family, friends, business relations, etc. Keep yourself surrounded by a group who understands your business goals as well as your daily challenges.
- Keep good relationships with other entrepreneurs in business and learn from their experiences.
- Breakdown your lifetime goals into daily goals and feel proud of your everyday achievements.
Final words: Challenges are the first step to success. Entrepreneur challenges help in building their learning curves. Constant perseverance, smart planning, and teamwork can help you get through the most challenging situations.
Multiple online resources are available to get you through your struggle period. All you need to remember is that businesses are not built overnight. Constant focus on smaller goals while keeping your organization’s targets in mind helps you climb the success ladder.