As an entrepreneur, you'll quickly discover there are literally hundreds of hurtles in your way to success. Some of these you'll clear without a problem, while others may cause you to stumble. As long as you learn from the pitfalls you'll have the skill and knowledge to clear these hurdles as well. While the specific challenges you'll face are unique to you and your own, individual business quest, there are four common stumbling blocks nearly every entrepreneur will run into, at some point in time. How do you make sure you're set up for success before ever reaching these road hazards? Consider the following valuable insights:
Probably the biggest problem any entrepreneur runs into is funding. Outside of individuals with very wealthy relatives, most people who are looking to start their own business or move down a varying entrepreneurial road will run face first into funding issues. Most start-ups and new businesses require some sort of funding. One of the top reasons a new business fails is because of its lack of financing. How can you be one of the successful ones?
For starters, begin small. Don't jump immediately into the deep end. Starting a business is exciting and you may want to just move forward as quickly as possible. It's great you're ready and willing, but this is also the fastest way to drown in an ocean of debt. Instead, start off slow. Begin with what you can afford. Perhaps all you really need to start off the business is a computer and an area of your apartment sectioned off. As your business grows, you can, in turn, begin putting more money into it. You should also consider paying for one need at a time. You probably have a dozen or two required expenses, but if you took on these from the beginning, you'd end up ten’s, if not hundreds of thousands in debt in the blink of an eye.
Starting off small might seem frustrating at first. For example, maybe you have dreams of running your own t-shirt printing company, but the giant, automated printer costs tens of thousands of dollars. Instead, you can begin with a single, manual press for a few hundred. This way, your finances can grow as your business does.
Starting off with what you can afford helps you with another aspect of financing: establishing business credit. There are all sorts of banks and financial institutions you can go to for a business loan. Many of these, especially a credit union (if you're a member) offer excellent interest rates on the loans. The only problem is, if you haven't run a business before, you have no business credit, and most banks won't offer you a business loan solely based on personal credit. By starting off small, you can grow your business and establish your business credit. All of this goes a long way in helping you secure an excellent business loan. It will take time, so be patient. There's a reason patience is a virtue. It's often difficult, but it pays off in the end.
The drive to begin right away and get your hands dirty may ultimately be the death of your business. As discussed earlier it can cause problems with funding. It can also lead to inferior planning. Murphy’s law suggests if something can go wrong, it will go wrong. That isn’t always the case, but if you don’t prepare for something and it does happen, you’ll end up scratching your head, wondering what in the world to do. Poor planning has ruined more than just a few start-ups. The push to start something as quickly as possible ends up running the business right into the ground. Once stuck in the ground, it’s very difficult to pull back out, make the necessary corrections, and begin again.
To avoid this problem, you simply need to take a step back and plan for everything. You can keep that excitement for the new business while you plan for every possible situation. Yes, you can and should learn from failure, but wouldn’t you rather avoid failure all together? Planning does exactly that. Planning doesn’t sound as thrilling as flying by the seat of your pants, but having a fully-oiled, functioning business is far better than not having one because poor planning caused it to collapse.
Don’t leave a single rock unturned. Plan your growth. Establish how you want your website to look and the kind of social media presence you’ll have. Look at funding and how you’ll go about securing it. Plan out the products and services you have. Look for accounting assistance, and have a very clear understanding of expenses and the amount of money you need to make before moving onto the next phase of your business.
These are just a few examples of planning out your business. Naturally, you'll need to spend more time on the planning aspect while you dig deeper and deeper into the pre-production aspect of your business. Don't move forward with your business until you know for a fact you've looked over, considered and planned for everything.
Falling in Love with a Trendy Idea
Falling in love and romanticizing a trending idea is very dangerous. It may come from a spur-of-the-moment conversation or the business idea may just pop into your head. Perhaps you’ve been reading about cat coffee shops or all the trending micro pubs popping up all over the place. You might fall in love with the trendy idea and assume you, too, can make a considerable amount of money on it. There’s nothing wrong with being idealistic, but you also need to be realistic.
For starters, things that trend also tend to come crashing back to reality sooner or later. Every industry has a bubble. There's a good chance if you're looking at this trending business idea, others are as well, and this will only go to inflate the bubble. Take the micro beer pub. A decade ago a town was lucky to have one, and the people who opened these destinations did so not necessarily to make money, but because they loved the craft. Now, it's difficult to find a city corner that doesn't have one. It's the trendy way to open a restaurant and make it stand out because it serves its own beer. The problem is many of these people do so without the same passion, which can lead to cost-cutting measures and an inferior product. The brewpub, like many other trending business ventures, will eventually burst and many of these locations will go out of business. You need to go for something you love to do, but not only interested in because it’s the current, hip idea.
On top of this, you need to be realistic with expectations, at least when starting off. You can then build on these expectations once each is realized. When you have overly-ambitious plans with a new business, it can cause any number of problems, ranging from a lack of funding to expanding too quickly. Let your ambitions grow as your business does. Rideshare applications didn't become worldwide services overnight. These started in individual cities and expanded outward from there. Be realistic and grow from it.
Relationships can make a business, but it can also bring it down. One of the most dangerous aspects of any entrepreneurship is founding it on a relationship. Perhaps you and a significant other come up with the idea together. That’s great, but you need to do so with a clear head. You also need to openly discuss and put into writing what should happen if you ever break up. What happens to the business? This is where pre-planning is so important to what eventually happens with your business. Generally speaking, starting a business with a family member is not highly recommended. This is because if the relationship goes south, it not only can destroy the business, but it can destroy an entire family as well. Think long and hard about starting a business with a significant other or family member.
Beyond starting a business with a friend or family member, it is very important for current significant others and friends to understand you’ll likely need to spend a good amount of time on the business, especially as you start it up (you’ll be wearing many different hats while you do this). It is important to talk this over with friends to make sure they understand. While most will, there may be some (especially significant others and close family members) who may not like it as time goes by. It can lead to a breakdown in the relationship, which in turn can affect the business, even if they are not part of the business. Make sure you surround yourself with quality, reassuring people who are willing to make this initial time sacrifice along with you.
There's no shortage of possible stumbling blocks as an entrepreneur. In fact, you may have run into more problems than you can count to this point. If you continue churning and moving forward, you'll always remain on the path towards success. However, by considering these tips and valuable insights, you'll hopefully avoid the four most common stumbling blocks many entrepreneurs run into along the way.
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