Challenges When Setting Up a Business
Starting a business is not a joke. Sure you might have had romantic notions about sitting in a plush office, with the cool air of the air conditioner blowing in your face. With a hot cup of coffee in your hands, as you look on to the floor full of customers. With business pouring in and a general congenial air about. Great thought, but it might not always come true. You know that right? I'm not trying to burst your bubble here, but just laying down facts. Starting a business is no child's play. There are a lot of challenges when setting up a business and for a long time after, till it finally reaches a point when it can earn you some profits. Until that stage comes there are a lot of challenges when setting up a business that you'll have to encounter.
The good news is that if you know about some of the challenges when setting up a business, you can avoid them. But in order to do that, we must know what are some challenges when setting up a business.
Experience and Skills
Many people (note how I did not use the word entrepreneurs) who get into a business do so without having any experience or skills to start a business. Neither do they research the business nor the market, effectively. Running a business requires you to have skills in all spheres that are important to operate a successful business. These include accounting, marketing, ordering etc.
Solution: Research the market well and know your business sufficiently enough that you can start it without reaching a dead end every single day. (You cannot be an expert on the first day, I understand that.) Having hands on experience really helps because it helps you to be in the thick of things and know exactly what problems you might encounter in a business. It also gives you the ability to solve those problems. Therefore, even if it means having to work in a related business before hand, gaining experience and skills and then branching out on your own, do it.
Capital
This is one of the most difficult challenges when setting up a small business. A business of this stature usually runs into a lot of difficulty when getting loans from an external source, and that is why they have to usually depend on their own savings or on borrowed money from friends. Limited funds have a direct effect on the growth of the business because there are not enough funds to expand immediately and the pressure to pay off debts is high.
Solution: Get the idea clear that there will probably be no profits to speak of for a year or two after you start business. In fact, it is not uncommon for new businesses to run into small losses. Once that is clear, you will probably find it easier to go on. Secondly, try and save as much capital as you can before starting out. Do not just foray into it, but plan, study and then get into it. Read more on small business financing.
Hiring Staff
This is a difficult challenge to face when it comes to small businesses. That's because, neither do you have enough capital to offer them benefits nor a very high pay.
Solution: The only argument that you can go with here, in the hopes of winning is if you word it differently. Never lie to your staff and promise them wages or benefits that you know you cannot give them, but you can definitely offer them hands on training and experience and the opportunity to grow with the business.
Time Management
When it's a new business and you're in charge, the staff's queries and the different issues will be yours to solve. It can get quite overwhelming sometimes. How do you deal with this?
Solution: There are two things you can do. Keep someone in charge. Then delegate duties to him so that some of the issues will be handled by him; or if that is not an option, you will have to wait it out. With time and experience, for both you and the staff, things will smoothen out and get better. Consult people who have businesses and talk to them about the specific challenges you are facing. Their points of view might help you to solve some problems. Read more on business leadership.
Expanding Business
If the business has to survive, it needs to expand to include the newer, better ideas that are foraying into the market. If they do not do that, they'll be run over. But the owner's lack of experience and skills might prevent this from happening. Read more on business growth strategies.
Solution: Why not go into a partnership with other businessmen who have the skills and a large client base for networking? Having a large network of people is always beneficial in expanding a business. By pooling different talents together, you can make a very successful business happen. Read more on business partnership and business networking.
Starting a business is not a joke. Sure you might have had romantic notions about sitting in a plush office, with the cool air of the air conditioner blowing in your face. With a hot cup of coffee in your hands, as you look on to the floor full of customers. With business pouring in and a general congenial air about. Great thought, but it might not always come true. You know that right? I'm not trying to burst your bubble here, but just laying down facts. Starting a business is no child's play. There are a lot of challenges when setting up a business and for a long time after, till it finally reaches a point when it can earn you some profits. Until that stage comes there are a lot of challenges when setting up a business that you'll have to encounter.
The good news is that if you know about some of the challenges when setting up a business, you can avoid them. But in order to do that, we must know what are some challenges when setting up a business.
Experience and Skills
Many people (note how I did not use the word entrepreneurs) who get into a business do so without having any experience or skills to start a business. Neither do they research the business nor the market, effectively. Running a business requires you to have skills in all spheres that are important to operate a successful business. These include accounting, marketing, ordering etc.
Solution: Research the market well and know your business sufficiently enough that you can start it without reaching a dead end every single day. (You cannot be an expert on the first day, I understand that.) Having hands on experience really helps because it helps you to be in the thick of things and know exactly what problems you might encounter in a business. It also gives you the ability to solve those problems. Therefore, even if it means having to work in a related business before hand, gaining experience and skills and then branching out on your own, do it.
Capital
This is one of the most difficult challenges when setting up a small business. A business of this stature usually runs into a lot of difficulty when getting loans from an external source, and that is why they have to usually depend on their own savings or on borrowed money from friends. Limited funds have a direct effect on the growth of the business because there are not enough funds to expand immediately and the pressure to pay off debts is high.
Solution: Get the idea clear that there will probably be no profits to speak of for a year or two after you start business. In fact, it is not uncommon for new businesses to run into small losses. Once that is clear, you will probably find it easier to go on. Secondly, try and save as much capital as you can before starting out. Do not just foray into it, but plan, study and then get into it. Read more on small business financing.
Hiring Staff
This is a difficult challenge to face when it comes to small businesses. That's because, neither do you have enough capital to offer them benefits nor a very high pay.
Solution: The only argument that you can go with here, in the hopes of winning is if you word it differently. Never lie to your staff and promise them wages or benefits that you know you cannot give them, but you can definitely offer them hands on training and experience and the opportunity to grow with the business.
Time Management
When it's a new business and you're in charge, the staff's queries and the different issues will be yours to solve. It can get quite overwhelming sometimes. How do you deal with this?
Solution: There are two things you can do. Keep someone in charge. Then delegate duties to him so that some of the issues will be handled by him; or if that is not an option, you will have to wait it out. With time and experience, for both you and the staff, things will smoothen out and get better. Consult people who have businesses and talk to them about the specific challenges you are facing. Their points of view might help you to solve some problems. Read more on business leadership.
Expanding Business
If the business has to survive, it needs to expand to include the newer, better ideas that are foraying into the market. If they do not do that, they'll be run over. But the owner's lack of experience and skills might prevent this from happening. Read more on business growth strategies.
Solution: Why not go into a partnership with other businessmen who have the skills and a large client base for networking? Having a large network of people is always beneficial in expanding a business. By pooling different talents together, you can make a very successful business happen. Read more on business partnership and business networking.
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