Starting a business is no child's play. There are a lot of challenges you are likely to face when setting up a business, and for a long time thereafter, till it finally reaches a point when it can earn you some profits. The good news is that if you are prepared for these challenges beforehand, you will be better prepared to deal with them.
Challenges to Start a Small Business
Every business starts small. With time, experience and goodwill, it grows into a bigger enterprise. And that is why it is always more difficult setting up a business, because you start from scratch. The challenges when setting up a business of this sort make themselves felt more intensely. Let us now take a look at some of the challenges that one might face.
1. Experience and Skills
Many people 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 it successfully. These include accounting, marketing, ordering etc.
Solution: Research the market well and know your business sufficiently enough so 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 prepares you for the 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 beforehand, gaining experience and skills and then branching out on your own―do it.
This is one of the most challenging aspects of 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 entrepreneurs 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.
3. Hiring Staff
In a small business, hiring staff becomes difficult because neither do you have enough capital to offer them benefits, nor a very high pay.
Solution: Never lie to your staff and promise them wages or benefits that you know you cannot give them, however, you can definitely offer them hands-on training and experience, and the opportunity to grow with the business, along with the pay that you can manage.
4. 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 and 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 smooth 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.
5. 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 hinder business expansion.
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, your business can become highly successful.
These are only some of the challenges when setting up a business. There are others you may encounter in the course of time. However, let these not discourage you, but rather help you to be better prepared in chasing and ultimately succeeding at your dream. All the best!