Challenges you will face while setting up a small business
While it is on a small scale, setting up an SME comes with its unique set of challenges, be it making money, finding the right partners and employees or product-market fit.
Robert Frost had said it perfectly- it is the road less travelled that establishes the key differentiating point amongst competition. And no one knows it better than the determined slew of entrepreneurs. To describe it fairly, entrepreneurship is a road less travelled that goes through the dark forest of anonymity, challenges, and failures. Yet, it is these tribulations that cement the mark of success for years to come. While 90 percent of business fails to survive first five years, few survive to become a story of success, setting pace for others to follow.
While there are sure shot mantras to succeed as an entrepreneur, here are a few challenges that you would face and what to learn from them:
For any emerging business, revenue is a pressing issue. Face the truth - you will not start making money well before an eighth or twelfth month of inception, and hence need to chart the expenses wisely. It fact, startups are seen reaching a break-even after close to 1.5 years into business, keeping persistence in mind. Additionally, you’ll require extra hands; contemplate on expanding the business, and pay vendors while investing. Ensure a sufficient amount of capital for sustaining at least 1.5 years of existence and scale. Also, there needs to be the balance between cost of customer acquisitions and customer life value, to ensure a steady growth of profit.
Vendor and partner
Although high levels of specialisation have ensured that starting a business today is not as difficult as the past, the troubles on finding a right partner at right price remains. If you come from enterprise background you probably will have hosts of service providers who have previously worked with you. Despite that, implementing older connections for your startup with small requirements and very small budgets would be difficult. On the opposite side, coming in as a fresher will lead to more errors than trials, which cannot be afforded. The apt strategy would be to find vendors who have previous experience in catering to small business and who are willing to work on agreeable terms, providing high quality and timed delivery.
Hiring and retaining people
Hiring is another important element that needs to be looked into. During your beginning, you have absolutely nothing to offer to a new joiner- neither a brand, nor a great salary. So how to do you safeguard your hiring and retention? For hiring, rely on HR consultants that facilitate your different requirements, at an economical pay bracket. This is a necessary expense that entrepreneurs should be encouraged to make. For retaining, create a culture that is progressive towards performance and focus on quality, while keeping great emphasis on the learning aspect. While you can’t pay handsome salary, you can always teach and expect your team member to do a quality job. As an entrepreneur, the cultural agenda must be set by the company leadership, based strongly on compliance; value system and performance, armed with top people who find a common connect with the organisational goals.
Coming up with a brilliant idea is just the first step, however entrepreneurs should know when to pivot basis the market dynamics. Most businesses fail because they are not able to align themselves with market reality. Understanding what sells and changing business to align towards it, will help you get your revenue figures faster. Change is essential and it should be embraced with a positive outlook.
Product and support
While you may have an innovative approach, if your product isn’t beneficial, it is of no value. Keeping customer focus by providing the right mix of emotional and functional benefit will differentiate you from the pack. Make sure you invest in your product upgrades/ iterations and intimately involve your support team in your customer (buyer) journey.
Most businesses don't fail due to poor planning or strategy, they fail owing to missteps in execution. Execution needs persistence, discipline, commitment, and hard work, reflected from the measures taken by top executives. With passionate execution and relentless persistence, your business will thrive.
While it may seem rosy to jump into the startup arena, to maintain momentum requires an extra dose of inspiration. Here, keeping yourself motivated will remain to be the biggest challenge. Pick up some sport, take time out for at least 30 minutes for physical exercise, and while you are busy creating something big, take time out to network and meet people. This will help you get a grip of the action yet maintain your peace of mind. It is your dexterity over the business that shall help you tide over difficult times.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)