Being an entrepreneur is an exciting journey. You get to set your own hours, build a company that meets your vision, and solve problems for consumers or businesses that use your products and services.
However, there are quite a few problems and pitfalls that can kick in at various stages of the journey. As the saying goes, forewarned is forearmed. In that spirit, we put together this article to help you be conscious of some of the problems and the solutions that may present themselves in your entrepreneurial journey.
The cash flow crisis
The single biggest killer of small businesses is cash flow. Without the money to continue trading, there is very little that you can do. Having a good accountant to do cash flow forecasts will help you spread your investment on capital spending and guide you to save money. This can be a superb investment!
Often accountants are available on a retainer basis where you can give them a call or drop them an email for a bit of advice. This can be invaluable as you go about building a business with limited seed capital.
Complaints and claims
In just about every niche, there is a certain level of risk carrying out your business activities.
There is often a large amount of outlay in construction markets, and there are physical risks during the construction process. But, even a tech support company may be liable to compensation claims if they failed to meet their service level agreements through human error or a situation outside of their control.
Getting suitable public liability insurance and other business insurance coverage, perhaps including key man insurance, can help mitigate risks that could stop your business in its tracks before it’s even grown to be self-sufficient.
Recruiting the wrong people
It is very easy to be tempted to recruit people that are just like you. As human beings, we tend to gravitate towards people with similar views and similar ideas.
This can be good when you are trying to create a homogenous group of like-minded thinkers, but problem-solving, rounded teambuilding and finding future business leaders typically come through recruiting a mixed bunch of people with complementary skill sets, attitudes and beliefs.
Being conscious of the pitfalls that can occur during the recruitment process, and ensuring that you have a well thought out plan of who you actually need, can help you avoid the problems that come with recruiting the wrong people.
Not doing adequate market research
Management and marketing professionals talk a lot about swot analysis. It’s a useful framework you should understand. In reality, you need to focus on the consumers you want to buy your products or services and whether what you are putting together will appeal to them.
By doing thorough market and competitor analysis, you can pitch your product to the right people in the right ways to have a good kickstart for your business. Too many businesses think they have a great idea and kick-off without really knowing whether anyone wants what they have to sell.
Trailblaze but be realistic
Just because an idea isn’t popular and fails at the market research phase doesn’t make you a failure. You’re best off stopping early and pursuing an avenue that has more merit and can be more appealing to more potential consumers.
Don’t get stuck on an idea if the reality is that there is no merit in it. On the other side of the coin, as an entrepreneur, you need to trail blaze. You need to create markets rather than just working to establish practices and market opportunities.
Be realistic about whether your product or service requires more investment in time and capital than you have available, and be realistic about what can be achieved. If you have a vision and a clear path to success, you can do just about anything worthwhile as an entrepreneur. Just make sure what you’re looking to do is worthwhile.
It’s a time-honoured adage that business success is about helping other people. The more people you can help, the more you’ll earn and become successful.
Many entrepreneurs fall into the trap of making it all about money. Money is a by-product of the successful process of helping people. Make sure your mindset is tuned to your customers, and you have a greater chance of success.