What Problems Do most Starting/small business face?
It is commonly assumed that starting your own business is the ticket to financial freedom and the ability to work and play whenever you want. However, this is usually not the case. Owning your own business requires a lot of your personal funds and/or assets and a tremendous amount of time. According to the Bureau of Labor Statistics data, approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first ten years.
There are many challenges that startups and small businesses face. We will highlight a few of the most common challenges here, including a lack of planning, lack of demand, lack of funds or financing, poor marketing, and ineffective work team.
Planning – do you know what you need to run a business legally? Do you have a concise roadmap for your business specifically?
One of the biggest mistakes a prospective business owner makes is jumping into a business without proper planning. We get the urge to start a business, run to the local government office, buy a business license, and begin incurring all kinds of expenses without sitting down and making a plan. A great idea is nothing more than just an idea unless we have a plan of action. The plan of action when starting a business is called a business plan.
Many business plan tools are available on the Internet, such as templates customized to the business you are starting that allow you to enter the information relative to your business. There are software programs that you can enter your information about your business into, and it will then take that information and create a business plan, including graphs and charts. There are companies out there that you can pay to write a business plan for you, or you can take the time to do it yourself. By creating a business plan, you set your business up for a better chance of success.
Demand – is this a marketable venture?
Sometimes the ideas we have to start up a business have the planning and other elements needed to be successful, but there is no demand for the product or service. Before starting your business, you need to research the market for the product or service in the business area. Then, you can reach out to local agencies to help you acquire the proper demand for your product or service. If you find that the demand is not high enough for your product or service, you can change your plan to include a product or service with a more increased need in your local area.
Funds and financing – can you get cash flow?
One of the most significant factors that contribute to the failure of a startup is poor financial provisions. Creating the business plan discussed earlier will give you a better idea of your financial needs and where you may get the necessary funds. There are different options for financial funding, and whether it is from personal assets, bank financing, or investors, you need to plan for the kind of funding and the amount of funding needed.
Maybe you have a good demand for your product or service and have your financial funding secure, but that is not all you will need to be successful. Another downfall of a business startup is a lack of marketing.
If you do not have the proper marketing, you will not be able to increase your business and grow as needed to maintain financial stability. There are many different marketing options that you can choose from to secure your success and growth.
Building your Team and Work Environment – who will help to build your business’ brand?
One final item you need to think about when planning your business is the team you will be working with, as they will be the backbone of your business. You want to make sure that you choose each person based on your needs. You do not need to choose them based upon their obligation to be a friend or a family member. Instead, you want to put together a team that you will be able to work with for a very long time.
Many different pieces of the puzzle determine your startup’s success. Of course, every startup is going to have challenges. However, the goal is to reduce those challenges by ensuring you have properly planned, demand for your business is prominent, you have enough financing available, have an aggressive marketing plan, and by creating the best team for your product and service. The more you plan, the more problems will be minimized during your startup.