Starting a new business is exciting, however, it takes sunshine and rain to create a rainbow. Starting a business works the same way, you won’t get that pot of gold without a few challenges to face first. Each business will face these challenges I mention below one way or another. It’s valuable to know what challenges to expect in starting a new business so you can either avoid or know how to solve them.
1. Controlling Cash Flow
Cash flow is probably one of the biggest challenges a business will face. Businesses can face this challenge even years after they have opened. It’s good to get cash flow organization down in the beginning so you don’t have to worry about it later on.
In simple terms, cash flow is how much money is coming in and out of your business during a specific amount of time. To be cash flow positive you will have to finish the month with more money in the bank than the beginning of the month and vise versa when being cash flow negative. Being cash flow positive can be tricky because you can run into problems such as customers not paying invoices on time or not paying at all, not having enough customers and returning customers, or not pricing your products correctly.
Solution: Creating a budget plan and being organized is the key to having control of your cash flow. Make a list every month on what is needed for that month to get or maintain a positive cash flow. The factors to consider are requiring down payment for your services and products, offering discounts for fast invoice payments or on-time payments, selling your products and service at a price that you can make a profit. Your profit will depend on the down payment and cost you require. The cost should always cover the materials that are needed, the employees and labor that is needed and all expenses required to make that product or service happen.
For more information on cash flow, click on the highlighted link.
2. Vision and Business Idea
You got a business idea, you’re happy with it and are excited to start. But, now what? How will you get people and potential customers to feel the same way about your business? Creating a vision for your business is important. Although you may find your products and services amazing, you need to get your customers to feel the same way.
Solution: Keep up with the latest trends and create a marketing plan. Always advertise your products and service as a solution to a problem. It’s good to invest in a marketing manager as they are specialized in this field. A marketing manager will strategize your business idea and vision and turn it into reality and look appealing to your audience.
3. Hiring the Correct Employees
No matter what kind of business you have, employees are a big part of the business thriving and reaching its best potential. Without good employees, the business will eventually fail. Your employees are the face of the company and what your company values and policies it represents. It’s challenging hiring the right employees especially at the beginning of a business. Hiring the wrong employee can cost your business, therefore, learning the key attributes to look for in an interview is important.
Solution: Before hiring someone, create a policy and employee handbook. This will make it easier when looking for employees as you can see if they can possibly match what you’re looking for and is also setting a strict example when handing them the employee handbook. Your employee handbook should include a phone template, customer service template, etc.
For tips on hiring the correct employees, click on the highlighted link.
If you’re planning an in-store business, finding the right location can either make or break your business. No matter how good the product or service is the wrong location can lead your business in the wrong direction. How can you find a business that needs what you are selling, is populated and a good price?
Solution: Where are your competitors located? If your competitors have been in that location for years and you know they are successful then a good idea is to open something up in the same neighborhood and lower your prices from theirs. Another strategy is seeing what neighborhood your business is lacking in. If a friend lives in a certain neighborhood and tells you they wish your type of business was in their neighborhood then consider going to that location and doing a survey test by stopping people in the neighborhood and simply asking them if they would visit your store if you were to open it there.
Entrepreneur offers insight on choosing the right location for your business.
It doesn’t take a business owner to know without money a business can’t run. In order to even start a business, you would need capital, let alone pay employees, buy materials, expansions, etc. So how do you get capital for your business idea?
Solution: Organize yourself and make a list of the variables your company will require. How many employees would you need? How much will the equipment and materials cost you? Bills? Etc. This will help you know if you need any more capital than you have already invested. If you already have some sort of capital, that’s great. If you don’t, no worries. There are options such as bank loans, private lending loans, and personal loans. You may need a loan to open up a business, or if you already have the capital to open up a business you may need the loans for other factors such as paying employees, etc.
Celeri Network offers business loans.
6. Time Management
Time management is a big challenge entrepreneurs will face. You will always feel like there isn’t enough time in the day to accomplish all your goals and get your business to where you want it to be.
- Create a goal list: Your goal list should include all the goals you expect to achieve for your business. Write down every goal you can think of, and divide them by years, months, and weeks. Spend time first on the goals that can be accomplished right away and take it from there.
- Create a list of what tasks are needed for those goals. If you start doing those tasks and you realize they don’t match your goals then don’t waste your time and simply just eliminate them.
It is very normal especially, in the beginning, to feel discouraged and uncertain with your business. Some things won’t go as planned or some goals won’t be accomplished fast enough which can lead to emotional stress.
Solution: You will have to overcome self-doubt and any negative thoughts to achieve success. A successful business does not succeed with a negative mindset. Having a strong support system such as your family and friends can really help. When you feel down, look at your goal list and envision once you have accomplished those goals what your business and life would look like. If you’ve already completed some goals, recognize that and appreciate yourself and give yourself credit and it will automatically relieve some of that stress.