Entrepreneurship is both rewarding and challenging. Research from a 2011 Harvard Business School indicates that about 30% to 40% of all high-potential startup businesses end up closing down and distributing their assets to claimants. (1) Any entrepreneurial venture is vulnerable to setbacks. To attain success, the likelihood is that you are going to be presented with some hurdles that you are going to need to overcome.
This article discusses five common entrepreneurship challenges you’re likely to face and how to overcome them, allowing you to achieve a positive outcome for your business. Read on to learn more.
Cash flow management
82% of entrepreneurs end up closing their businesses due to poor cash flow management, as a study by US Bank indicates. That’s why a vital element of the success of your business is to manage cash flow by tracking income and expenditure meticulously. (2)
There are a number of ways you can do this. You may want to adopt better invoicing strategies to ensure that you get timely payment from your clients. Consider that, on average, a typical small business has unpaid invoices worth USD$ 84,000 at any point in time. This can bring enterprises substantial losses. (3)
One way to ensure that you receive timely payments from your customers is to embrace technology and automate your invoicing. Sophisticated invoicing software on the market today is designed to support exactly this. Jobber is one such example who offer free professional and fully customizable invoicing templates. What makes them even more useful is that they can be used as estimates to quote for work, if you are in the home service industry for example, and repurposed into invoices after.
Invoicing software also allows you to automatically send notifications to clients who delay payment. Such close management of the payment process ensures that far fewer invoices are left unpaid, significantly reducing the chances of cash flow problems.
Second on this list of common small business challenges is the lack of startup capital. If you find yourself in this trap, you may need to seek alternative ways of raising business capital.
Here are some options you can consider:
Applying for a bank loan
Seeking aid from venture capitalists
Finding an angel investor
It’s never a guarantee that all these options will work. What you need to do is try them one by one until you succeed.
As a small business, you may lack enough personnel to help you carry out tasks, thus leading you to juggle many of them single-handedly. As a result, you may not finish crucial tasks on time. This can quickly become overwhelming if it takes over your personal life too.
As a solution, you may:
Prioritize handling the tasks that lead you to achieve your main objectives
Create and adhere to a list of goals to accomplish on a long-term and short-term basis
Set boundaries for when your business life ends and where your personal life begins, and vice versa
If you have staff, assign them tasks to ease your workload
Generally, use all the time management hacks you can find
According to research, a significant correlation exists between time management and achieving your organizational goals. On this account, it’s paramount that you efficiently manage your time. (4)
For the success of your business, it’s essential to establish your customer base. Most startup businesses, however, fail to identify their right target market. Thus, they end up in losses, which may lead them to closing operations. A related study from the US Bureau of Labor Statistics (BLS) indicates that about 20% of businesses fail within the first two years, and only 25% make it past 15 years. (5)
You don’t want to end up shutting your business within the first two years. So, consider instituting proper marketing strategies. Begin by carefully planning your business goals to define your target market. Then:
Establish your business ventures by researching consumer demands
Explore all possible channels to advertise your business
Create achievable, feasible, and flexible marketing strategies
Constantly update your marketing plans to adapt to demand
However, if marketing management proves challenging to you, you may opt to outsource marketing expertise from professionals who’ll offer skilled services with a higher probability of success.
You may be questioning your abilities in business management, so you hesitate to take the first step to put the business in motion. If your business is constantly experiencing impediments, this worry may intensify.
However, always remember that every successful business person went through losses, rejection, and other hurdles. Not everyone will be interested in your services. Despite this, keep on exploring further options on how to realize enterprise improvement.
If you did your due diligence into researching the market demand, you’ll undoubtedly find customers. If you’re hardworking enough and maintain optimism in your dealings, your business will yield profits and stabilize in due time. Additionally, remember that every extraordinary journey begins with a single step. So, take the first stride.
Setting up a business can be a challenging affair. However, for every challenge, there’s a solution. Some of the common challenges entrepreneurs face include: cash flow issues, lack of capital, poor time and marketing management, and self-doubt. If you’re going through any of these challenges, solve them by implementing the highlighted tips so you can end up achieving business stability.