There are millions of small businesses in the USA alone and they employ over 50 million people. Many people dream of starting a business and if you can succeed in doing so, you are truly in control of your own life. Unfortunately, succeeding in operating a small business is not always easy. In fact, over half of all small businesses fail sometime within their first few years.
So as you can imagine, there are many challenges for new businesses and new entrepreneurs. While these shouldn’t deter you from trying to start a business if that is your dream, it is important to be aware of the potential problems. With that in mind, this blog post is going to look at some of the largest challenges for new businesses.
Financing and Funding
No matter the type of business you are starting up, you will require some start up capital to get yourself off the ground. Money is important for everything from paying employees, to marketing, and even renting or purchasing space to work. While some people are lucky enough to have enough in savings to start their company, that isn’t always the case.
If you cannot self-fund the business, you need to look at other ways to acquire financing. This will include a lot of networking and speaking with potential investors. In addition to investors, you can also go to the bank or smaller local lenders and see what sorts of business loans they offer. Choosing how to finance your business is tough, but it is the necessary first step.
Building a Team
If you have never run a business before or have never formed a team, this can be a big challenge. Choosing the right team to help get a start-up off the ground is very important. Each person will be instrumental in the company ultimately succeeding or failing. When the pressure of filling roles grows, it’s important to still look at the little things.
What does this person bring to the team? Are they worth what they are being compensated? Are they a fit for the culture of the company? These are all some of the questions you must ask yourself when building your team.
While having a larger team is necessary if you want to scale your business and take it to new heights, don’t jump to create a team right away if you don’t need to. Some businesses can be run as a one man or one woman operation for a while before needing to add new talent to the roster.
Procurement and Purchasing
When operating a business that creates or sells a product, procurement is one of the most important factors in your success or failure. A lot goes into decision-making in the area of procurement to ensure the right purchases are made, and it can be a challenge to navigate and get right. You need to negotiate prices, research the suppliers, analyze the value, control inventory and more.
Even if you don’t sell a product, you will have to purchase tools or software to offer your service to clients. Your company needs to ensure they are making wise purchasing decisions as spending too much or purchasing the wrong items can be very costly. Using a tool for SaaS usage monitoring can help you get the most out of your purchasing budget.
We hope that this article has been able to help you identify and get over the biggest challenges for new businesses. While getting over some of these challenges or hurdles can be tough, running a successful business is incredibly rewarding, so don’t give up!
