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Last Updated on January 20, 2024 by Work In My Pajamas
Entrepreneurs are a special breed of people. It takes a particular kind of person to have the skills and determination to start a business from the ground up, and there are a number of challenges that entrepreneurs face, that don’t apply to other people in the workforce.
In This Post:
Covering Living Expenses
People who are employees know that they can rely on a regular income, but an entrepreneurs face an uncertain future with their incomes and paying for their living expenses. Most entrepreneurs can’t just immediately leave their jobs to start new businesses, but they have to have a transition period, where they start their businesses, but still work at their current jobs.
This transition period varies from person to person, and it can be a very difficult time if you’re putting in a lot of hours for both your job and your new business. Before leaving your old job, try to save enough money to cover at least 6 months of living expenses. This will give you time to devote completely to your new business, without the added stress of working at a job, as well.
Financing Your Business
This is something that must be considered well before you open your business. Decide how you will fund your new business. Are you using your personal funds, or are you taking out a loan to get your business started? Maybe you’re going to rely on investors to fund your business with their money. Or maybe a combination of all of the above. Whichever method you choose, you have to plan out the finances for your new business.
Being the Visionary
This is a challenge for many people, the ability to see beyond the immediate future. It can be very hard to see the big picture of where you want your company to go in the future, not just in the first few months the business is opened, but 3-5 years down the road. It’s important to plan for the long-term future, not just for the more immediate success and profits. The risks don’t stop with the launch of the business, as it can be risky to take steps to increase profits. However, a good business is always growing, and it’s important to plan for that growth.
Teambuilding
This is something that may be difficult for entrepreneurs, especially if they’ve never had to work together closely with others. If you choose to enter into a partnership of any kind, make sure it is a good fit for all parties involved, and put everything in writing. Verbal agreements are generally not legally enforceable. You may also want to outline how to handle disagreements with any business partners. If you’ll be hiring employees, take your time to make sure that the employee is a good fit for the business.
Loneliness
This is a challenge that many entrepreneurs aren’t expecting, but it can be very real, and this is particularly true for online businesses, when business owners don’t necessarily have a lot of contact with others. Many entrepreneurs spend so much time dedicated to their new businesses that they lose sight of everything else, and only spend limited time with family and friends. It’s important to find a way to balance business and pleasure, and not let either completely control your life.
Making Rules and Decisions
Running your own business means that you have to make the rules for your business, and it means that any decisions made by you will affect not only you and your business, but your customers and any employees you have hired. It’s important to have business policies in writing, particularly if you have partners and/or employees. Written guidelines make it easier for everyone to be aware of what their rights and responsibilities are.
Delegating Tasks and Hiring Employees
Entrepreneurs often have trouble trusting their business to anyone else, and this can make the hiring process difficult, even when the business is growing. Don’t rush through the hiring process just to fill the position. Take the time to find the right person, with the risk skillset. It may be helpful to do multiple interviews or conduct working interviews with selected people. Understand that you can’t always do everything involved with the business on your own. Know what tasks can be delegated to others.
Marketing
This is one of the most daunting challenges for many entrepreneurs. Many new business owners either don’t know how to handle marketing, or they ignore it completely. They may tell themselves that they can’t afford a marketing strategy, or that they don’t need it. The truth is, every business must have a marketing budget, even if the budget is very small. Social media is a great way to market your business, at a relatively low cost. If you don’t understand marketing, find someone who does.
Business Systems
Choosing the right business systems, such as computer software, for your company can be a confusing process. Take time to research different versions and choose the one that’s most appropriate for your business. Once you make that decision, learn to use the software to the best of its ability. The computer software is only as good as its users.
Legal Issues
The legal process of setting up a new business can seem overwhelming to entrepreneurs. There are a number of legalities to sort out, including how to structure a new business (for example, a sole proprietorship or a partnership), how to protect yourself and your family from liabilities, permits and licensing that are required before you can open a new business, and taxes that must be paid to the government. If you don’t feel comfortable doing due diligence, then you should seek legal advice from someone familiar with business law.
Bottom Line
These are just some of the more common challenges facing entrepreneurs as they set up their businesses. However, these challenges are not insurmountable, and with research and seeking advice from trusted sources, they can be addressed properly. One final piece of advice for entrepreneurs is to find mentors, people who have been down the road of opening businesses before, as these people have the experience to be of valuable assistance.
