5 Challenges New Businesses Face & How to Overcome Them
The giant companies of today were once startups. Every business starts somewhere, and your future Fortune 500 company won’t exist if you don’t first persevere as a small business first. The challenges can indeed be daunting, and many new companies often burn out before even getting off the ground because of inadequate planning and execution.
In this article, we will share five challenges that many new businesses face and how you can overcome them effectively:
1. Creating a solid business plan
Whether you’re self-funded or looking for investors, you’ll need a solid business plan to outline your plans and track your progress and missteps. Having a solid plan also shows that you’re capable of thinking forward.
For many new companies, however, they prefer to hit the ground running without laying out a solid and comprehensive plan first. While it is possible to gain some success this way, having a strategy will help you avoid some potentially costly mistakes. Some even think that following this step will keep them from being agile and flexible, which is far from the truth. A solid business blueprint is one that you regularly update because it is a living document that should grow with your business.
2. Reaching the right customers
You’ve spent considerable time and resources perfecting your product or service, and now you need to sell it. The success of this step all boils down to which customers you want to attract, and how you intend to keep them. If you’ve done your business plan, you will likely have this already figured out. If you haven’t, however, it’s best to start with creating a customer profile.
You can do this by analysing profiles of past customers, or creating one from scratch, based on educated guesses about similar businesses in your industry. Try to find out important demographics, such as age, gender, income brackets, educational backgrounds, location, and buying habits. It is important to gather as much valuable information as you can because this customer profile will inform you how to reach your target audience and earn their trust.
3. Not knowing where money counts
Running a cost-efficient business is more of an art than science. It’s always best to start looking at which expenses directly drive your profits forward and the ones that are more for comforts. Bear in mind that little, seemingly insignificant expenses do add up and before long can be a major drain.
Nevertheless, you should also be able to look ahead and see which areas you should put money into. The world is always changing, which is why your businesses should always look into ways to improve and adapt. It’s more of a balancing act, between knowing where you are and where you aim to be in the years to come.
4. Attracting (and keeping) talent
Your workers, like yourself, are human. They respond to the same values, opportunities, and setbacks as you do. More than that, they are the most important asset of your business. By investing more in your workers, you are ensuring that your company is being driven by productive and motivated workers in the long run.
The biggest mistake a business owner can make is to treat their employees as dispensable tools that they can replace. Every day, your workers gain valuable experience and insight in your industry which helps your company thrive. If they feel underappreciated and they leave, keep in mind that they’ll take that expertise elsewhere. This is why you should always be thinking of keeping them and encourage a culture of growth and value.
5. Strategizing business loans
Business loans are part and parcel of what makes companies work. However, many people shiver at the mention of debt. In fact, you may be surprised to know that most companies are always in debt. Most startups, particularly in the technology industry, are dependent on seed funding from venture capitalists who expect to be paid in equity and shares. Even selling shares on the stock market is a form of debt.
Many business owners are so afraid of debt that they’d rather close shop than to accumulate years of debt. Some who ask for it too late end up acquiring crippling debt and shutting down ventures altogether. The trick is to know when to get the loan, what you’re going to spend the money on, and how you’re going to pay it back.
The entire business experience is full of ups and downs, risks and opportunities. The trick is to make wise decisions that will help your business thrive continually. Sometimes, however, it’s hard to see which option to choose, but with the wealth of information available to you today, you will be better qualified to make the right decisions.
If you’re struggling financially to keep your small business going, apply for our business loans in Sydney, Melbourne, or Brisbane. We can help you with ease!