While it is rewarding as an entrepreneur to start a new business and see it grow it can also be difficult, and the process isn’t always as smooth as you would like. We have compiled what we consider to be 5 most common challenges a new business can come across and how best to deal with them.
- Uncertainty: While no one can look into a crystal ball to tell the future there are ways to help safeguard your business from certain threats. While you can’t predict any external threat to your business, such as a change in Government policies or shifts in the economy, you can use forecasting tools to help create backup plans should something happen. With forecasting software, you can attempt to predict your business future finances and trends in your industry, and from this information you can set up a plan A, plan B, or even a plan C to help protect your business.
- Competition: Every small business is in competition not only with other small businesses but larger more established businesses. This makes it very important to stay ahead of everyone else, make sure that you are keeping up with the current demands and try to predict any future trends before your competition does. To do this you will need to make sure that your business is flexible and nimble to respond to any changes. It is also vital to find your niche, work out what is currently missing from the market and steer your business towards it to give yourself an edge over your competitors.
- Access to capital: Securing funding and capital for a new business can be difficult, especially if you don’t have a credit history yet or a poor credit history. Creating a detailed funding strategy is an important method of overcoming this problem, along with keeping your finances in order and having in-depth financial reports to show to lenders will increase the chance of getting the funding you need. It’s also vital to make sure suppliers are paid on time, that your debt levels are being controlled and not getting out of hand and ensure that your cash flow is always positive.
- Hiring and retaining employees: One of the most important issues is making sure you are attracting, and most importantly retaining, talented employees. Offering competitive salaries and enticing benefit packages is a starting point but in the current market there are other things to consider. You will need to consider your brand’s reputation, is business being run in a sustainable and eco friendly way and are you running it in a corporate and socially responsible way (CSR). New employees, especially Millennials and Gen Z workers, are taking this into consideration just as much as salaries.
- Keeping up with technology: Technology is always evolving at a rapid rate, with new technology feeling like it’s coming out every few months. While it is a daunting prospect trying to keep up is vital that you do, the trick is making sure you are keeping up with the correct advances. Try to keep an eye on any apps or innovations that can help smooth out any of your internal processes to begin with, can you use a new app to streamline our bookkeeping or finances. Can you automate any of your processes rather than having to spend time on them? Make sure you are doing our research and homework before you make any decisions!