6 Challenges Faced by New Business Owners and How to Overcome Them - The Leamington Observer

6 Challenges Faced by New Business Owners and How to Overcome Them

Leamington Editorial 1st Aug, 2022   0

Every entrepreneur who starts a new business has a dream. They want to provide a product or service that will delight customers and also earn a handsome financial return.

However, too many of these dreams aren’t realized. Launching a new business and successfully steering it through the early years is not easy. There is so much complexity with so many challenges that a new business owner can easily be overwhelmed.

If you’re trying to get a new venture off the ground, here are six of the most significant challenges you’re going to face. Fortunately, they’re not insurmountable, and there are steps you can take to deal with them.

1. Cash Flow

Cash is the lifeblood of a company, and lack of it sinks more new enterprises than perhaps any other factor. Few new businesses are awash in cash. They struggle to keep up with the bills while waiting for the inflow to arrive.

You complete a job, send a bill, then wait as much as 30 days to get paid. Or you buy inventory, but it doesn’t generate cash quickly enough. In the meantime, the lights have to stay on and vendors and employees need to be paid.

For service companies, an important key is rapid invoicing. You might be able to insist on a down payment, reduce the allowable invoice period or require immediate payment. For retailers, resellers and manufacturers, manage inventory. Be realistic about what you will use or sell. Inventory is valuable and adds to your assets, but you can’t pay bills with it.

Plan, budget and keep careful control over spending. Where you can, negotiate longer payment allowances from vendors. Acquire plenty of financing when you start out. Most business owners will need more initial cash than they anticipate. When you draw up your business plan, build in a cushion to get you through times when the dollars aren’t rolling in.

2. Hiring People

In times of low unemployment, it can be particularly difficult to find workers. Still, hiring the wrong person is harder on your business than not hiring anyone at all. Firing and replacing an employee is difficult and expensive.

Sorting through applications and interviewing candidates is tedious and time-consuming. Try to avoid even having to consider people who aren’t a fit. Be specific in advertising your job openings. Be explicit about what the qualifications are, what the job duties will be and the hours, pay and

benefits. When you do interview, ask questions that speak to the candidate’s experience, their attitude and dedication and their long-range goals.

When you find the right people, you want to keep them. Ask them what it will take for them to keep working for you. Do they want pay raises, the opportunity to learn new things, work-life balance, a chance for promotion?

Be deliberate about the onboarding process. Make sure new workers have everything they need to understand and perform their job. Listen to them and value their opinion. Provide a workplace that’s comfortable and pleasant, one that you would want to come to every day.

3. Finding Customers

It’s been said that if you build a better mousetrap, folks will beat a path to your door. That’s not necessarily true. If they don’t know what you have to offer, how will they buy it? You have to figure out who your potential customers are, where they are and how to reach them. If you need traffic to a physical building, it must be prominently located. If you acquire new customers online, you need a presence where they are. If they tend toward one or more social media platforms, you’ll have to be there right with them.

You’ll have to advertise. That could be online, print, broadcast or even billboard. It may be worthwhile to consult a marketing professional. There are techniques such as surveys and focus groups to find out who your customers are and what they want. You can use coupons and special offers to persuade new customers to give you a try.

A great source of future sales is people who have already bought from you. If you can capture customer and prospect data in a customer management relationship (CRM) system, you can use such things as demographics and social media usage to target your marketing efforts.

4. Time Management

If there were about 35 hours in a day, every small business owner would have time to do everything they could think of. But you can’t do it all. If you don’t prioritize, you could wind up spending most of your time on detail tasks that don’t serve your customers or make money for you.

Strategic planning may feel like just one more task, but it’s more than that. You should take the time to document your goals, including long-term, annual and monthly goals. Then you should take note of what tasks achieve them. If a task doesn’t support any of your goals, can you eliminate it? Intuitive time management app like harvest that can be usefully.

Not everything has to be done by you. What can you delegate? Showing someone else how to do something may take longer the first time, but it pays off every time that person does the task in the future. You may be able to outsource certain administrative functions such as bookkeeping, payroll, accounting or even marketing.

You should spend most of your time serving your customers and creating the products and services that they want. Anything else is a lower priority or a candidate to be done by someone else. Always

be asking yourself whether what you’re doing right now is the best use of your time. If you’re entering data or filling out forms, it may not be.

5. Brand Development

You generate revenue by providing specific goods and services. However, it’s important that customers know in general who you are. When you establish a brand, you become widely known, and people will think of you when they think of the goods or services you have to offer.

Consider TV ads and how many of them talk about the company rather than some specific product they sell. Many marketers say that brand advertising is even more important than product advertising.

It takes repeated impressions for customers to be aware that you exist and that you have something they might want. Every print ad, every social media post, every logo exposure will put your brand into the minds of your potential customers and make them more likely to think of you when they’re ready to spend their money. If people become loyal to your brand, they’ll be inclined to buy whatever products you offer.

Starting out with a new brand is challenge it takes time gain that initial recognition. However, it’s important to begin on the right foot by looking professional in regards to your website, logo, social media post and brand imagery tools such as Tailor Brands can help with this but you can’t just look professional, to build a brand you have to live your values and be true to your audience.

6. Business Growth

If your enterprise is successful, you’ll reach a point where you can’t take on any new business without making some changes. Some one-person businesses are content to reach a certain level of activity and stay there. However, most will want to extend their reach. They’ll have to hire more people, acquire more inventory or modify processes to increase capacity.

The more your company grows, the less hands-on work you can do yourself and the more time you’ll have to devote to being a manager. You’ll have to spend more effort developing employees and giving them the tools and the skills they need to take over the work that you used to do.

You may have to automate more processes, expand your computing power or outsource work that isn’t customer-facing. You might need to find more vendors with greater capacity. The role change from in-the-trenches worker to managing owner is not one everybody successfully makes, but it’s a requirement for growing a business.

The Challenges Every Small Business Must Confront

You may be really good at the service you provide or exceptionally knowledgeable about the products you sell. You may be a passionate expert when it comes to customer service. However, that doesn’t make you exempt from the realities of running a small business. If you can successfully tackle these six challenges, your company will be on the road to prosperity.

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