Starting your own business is a huge challenge. It’s one thing to have a brilliant idea for a money-making venture, but it’s another thing completely to put in all of the hard work, risks, investment and creativity into turning it into a successful business. Once you have established your business, it is not time to rest on your laurels yet because you must always be growing, adapting and tweaking your business model. You will always have the challenges of hiring the right staff, building your brand and staying competitive in the marketplace. What are some of the biggest obstacles and challenges which you will face when starting up a small business? Here are a few of the most important ones:
Being Too Dependent on One Client
If one single client makes up more than 50% of your income, you are playing a risky game. At any given day, that client could disappear for any reason, leaving you scrambling to make ends meet. When it comes to running your own business, the more diverse the client base you have, the more secure you are. Unfortunately, when we have a great client who is meeting all of our needs, the tendency is to sit back and enjoy, which is what will leave you completely unprepared should they disappear unexpectedly. The trick to this is to be hungry for new clients, even when you have a big fat client at the moment who is putting food on the table. You should be always on the lookout for new leads and opportunities to grow your business and make more connections.
Bad Cash Flow
One of the biggest obstacles to running a small business is the money side of things. You must be able to manage the cash flow of the business so that you always have enough cash to cover your bills and keep the business from diving dangerously into debt. Many small businesses have failed due to cash flow problems as they overestimate their income and underestimate their expenses. Make sure that your business will be able to keep cash flowing smoothly. It can help if you have a lot of capital, or if you are able to pick up extra income whenever needed.
This is why many people start up a business on the side while still working a “day job”. Although this gives you slightly less time to work on your business, it also ensures that you will never run out of cash so that you will be secure enough to let the business develop. Another way to improve your cash flow is to use online accounting software such as QuickBooks Online. If balancing a budget is not your area of expertise, software such as this makes it a lot easier to track the financial side of the business.
Fatigue and Burn Out
Starting your own business, especially in the beginning, usually means working harder than you ever have done at a 9-5 job. You will likely be working longer hours than your employees and putting 110% of your effort into the business. In the early phase, this is essential so that you can grow your business and give it the legs it needs to stand on. You should love what you do, otherwise why make it a business? However, even if it is your passion you can still get exhausted by working around the clock. This can lead to bad decisions and disillusionment, so make sure that you give yourself the breaks that you need and find a sustainable pace which will keep your business running smoothly without wearing on you too much. This might mean hiring some good quality staff that you trust to take over the key responsibilities when you need them to. These are all challenges that many small businesses face, but they are not the end of the world. It is completely possible to overcome these challenges in order to create a successful business.
Carlo Pandian is a freelance writer and blogs on business, technology and online tools. He loves providing useful business tips for start-ups and entrepreneurs.