Understanding 4 Big Challenges to Your Start-Up
You’re your own boss now—free to determine your own destiny and reap the rewards. But as a start-up, you also face your own set of challenges. Your entrepreneurial spirit can go a long way in solving these issues but sometimes you could use a little help. Here are four challenges faced by many start-ups along with factors to consider when dealing with them in your small business.
Launching a business takes time. So you need to start will a full tank when it comes to capital. That includes start-up as well as working capital. You might be able to secure a loan for equipment but few institutions will lend operating funds, especially to a new business without a track record. So you need to plan for other income sources. Some use savings, others launch while still working another job, and some tap family members. In any case, it’s important to start with a full tank (or at least have a spare one ready).
Shiny Object Marketing
New businesses need to get the word out. So it’s tempting to hit the market with glossy ads and brochures. Those expensive promotions might be appropriate if they’re reaching the right people. It assumes you know who your target market is and if they’ll see what you’re marketing. That’s why it’s important to closely link your promotion with the target. One way to do that is with search-engine marketing. The cost is linked to people who already have an interest in a specific topic that relates to your business. Start on a small scale and increase the buy based on the results.
One-Hit Customer Base
Gathering and keeping a good customer is the name of the game, especially for a new business. But putting all your client eggs in one basket could lead to problems. What if markets change and your golden egg decides to leave the nest for a competing small business? You’re scrambling to bring on new customers while your business sits idle. That’s why it’s important to diversify your client list. One way to do that is to look for opposite clients. For example, the business cycle for lawn care business and snow removal companies run in opposite directions. While one is up, another is down. Having both as clients can help generate more consistent activity throughout the business cycle.
Adding staff can be a sign of a growing start-up. But it also adds more responsibility. Now you have to recruit, train and motivate employees. It can also be difficult to maintain the same quality as when it was just you running the business. That’s why it’s important to establish performance standards for your staff. Some have success with regular one-on-one meetings with each staff member. You can review their performance and coach for improvement. It’s also an opportunity for them to give ideas and feedback on the business. That can be very motivating for your staff.
Starting your own business can be extremely rewarding, as well as challenging. Approaching those challenges can be a little easier by watching for these potential issues. Then consider how you might tackle them.