There has never been a better time for those of us with an entrepreneurial mindset than now with the amount of opportunities available. Along with these opportunities also comes significant challenges. This article will examine the most frequently encountered challenges entrepreneurs face and offer some advice.
1. Getting Your Finances in Order
One of the biggest reasons that small businesses fail is due to poor financial management. It is essential that you keep a razor sharp focus on your cash flow and know exactly where every penny is being spent. However, it is hard to do so when being paid is out of your control. You may complete the work and bill the client, but they don’t anticipate to pay that invoice for 30 days. In the meantime, the entrepreneur has to pay for food, rent, lighting, and numerous other bills. Then if the customer doesn’t pay within those 30 days, the situation is magnified even further.
Proper budgeting is essential and should always be a priority for any business. In an ideal world, you should aim to budget at least one month in advance. In other words, when you get paid in January, aim to pay February’s bills. This gives you a buffer in case problems arise, but getting to this stage can be a challenge.
Another solution can be asking for a payment up front, at least for expenses such as materials that will be required for the job. You could also be more aggressive on your invoices, requesting payment within 15 days rather than the customary 30. A final option would be to look at the other side of the equation and see if you can pay your own bills 30, 60, or even 90 days after, which would then reduce the pressure on your cash flow.
2. Building a Team
Employees are the lifeblood of your business. You must hire the right person for the right job at the right time, easier said than done. The key here is in your job description. Most entrepreneurs don’t put enough thought into posting the required qualifications and roles for a position, and then are inundated with poorly suited candidates. Be very specific with what you need, the work that the job entails, and the qualifications and qualities you are looking for in a candidate. This will certainly reduce the number of applicants you receive, but the quality of those candidates will be substantially higher.
3. Managing Time Effectively
When you own a business, you are understandably very passionate and determined to make it succeed. Unfortunately, there are only so many hours in the day, and it is critical that you spend your time wisely. Plan out your day so that the most important tasks will be completed on time. Don’t get distracted, and trust your employees to work on the tasks you have assigned them. This is one of the toughest challenges that many business owners face… but the fact remains that you simply cannot do everything on your own. Learn about the art of delegation and having faith in your staff.
4. Mastering the Art of Marketing
Marketing is one of those skill sets that can be very hard to define. Even the biggest companies in the world occasionally have failed product launches. Effective marketing is fundamental to the growth and success of your business, which means that it might be worth employing a team of professionals who will be able to properly execute the campaign. Keep in mind that refined marketing can deliver a huge return on your investment, when done properly.
Running your own small business is full of challenging and exciting problems. It is simply impossible to be an expert at everything. The real skill is knowing where your strengths, and perhaps more importantly, where your weaknesses lie. Once you are aware of those, then you can either work to improve them or delegate those tasks to people with the necessary skills and expertise. Check out some of our other blog posts for more information and solutions along your entrepreneurial journey!