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“A problem is a chance for you to do your best.” – Duke Ellington (Pianist, Composer)
In 2014, I started my business, and it was nothing less than an achievement for me. I had planned all the aspects and was confident that I would be able to operate everything smoothly. But I was proved wrong.
I understand how challenging it is to sustain in this competitive environment, and that too when you are starting from scratch or have limited resources. Due to these odds, 18.4% of businesses fail in the first year, and only 25% make it past 15 years. (Luisa Zhau: The percentage of businesses that fail)
To save you from becoming a part of such statistics, I have decided to share six major challenges I faced in this journey. So, if you are a small business owner or thinking of starting soon, then this article will help you prepare better and increase your chances of survival in this crowded market.
1. Managing Family and Ownership Issues
Some of my family members have shown active participation in my business and have been with me since day one. Though they played a significant role in the growth of my business, their involvement also led to some issues.
The line between professional and personal life often gets blurred when working with family. Conflicts of interest and emotional household dynamics can complicate business operations. Another major issue that we faced was with inheritance, equity, and profit-sharing, at a certain point, we had to sit down and address the elephant in the room.
So, I would suggest you keep such things clear from the start. You can read how to handle unequal inheritance, to learn about cheating a fair but unequal inheritance.
2. Financial Management and Cash Flow Issues
Cashflow is nothing less than oxygen for small businesses, if you want your venture to survive you need to have a proper financial management system. In the initial years of my journey, I made the huge blunder of not planning and tracking my finances adequately, leading to serious consequences.
I feel fortunate that I was able to bounce back from this setback, but it is not uncommon for entrepreneurs to get stuck in the vicious cycle of debts and loans in such situations. So, it is always better to hire a professional financial planner or accountant, based on your requirements.
FUN FACT Despite economic challenges, small businesses have proven to be surprisingly resilient. Small businesses in the U.S. contributed more than $13 trillion to the economy in recent years!
3. Hiring and Retaining Talent
You will find queues of people standing to get employed by a renowned company, but when it comes to small businesses, people often hesitate to even apply. I remember how I struggled to find suitable candidates for the jobs.
Due to the lack of funds, I could not offer higher amounts as salaries. Starting from scratch did not work in my favor either, as there was no previous record of reputation proof, which repelled the candidates even more.
To tackle this issue, I offered additional benefits and flexibility to my employees and tried my best to foster a healthy work environment.
4. Regulatory Compliance
compliance with all the regulations is especially challenging for small businesses, due to lack of expertise, experience, and limited budget. When I started, I did not know much about all this, and dealing with the complex and ever-changing laws was overwhelming for me.
So, I decided to take a wise route and hire a professional. You might think that it is a costly solution, but trust me it is much better than ending up in legal trouble.
5. Marketing and Brand Awareness
Marketing is essential for growth, but finding affordable and effective ways to promote a brand can be difficult. For many small businesses, local awareness and customer loyalty are key parts of a successful marketing strategy.
With already established brands serving in the market, it was extremely challenging for us to stand out in this crowded environment and make a name for ourselves. The lack of resources added tenfold to this problem and made it even more difficult for us to reach our target audience and face our competitors.
To deal with this issue, I decided to focus on niche markets, leverage low-cost marketing channels like social media, and put effort into building a strong relationship with the already existing customers, encouraging referrals and word-of-mouth sales.
DO YOU KNOW? Small businesses are an integral part of the economy still, a major percentage of them struggle to make ends meet. 83% of small business owners earn less than $100,000. And there is also a significant number of those who make less than $50,000.
6. Time Management and Avoiding Burnout
In the initial days, we were operating with a small team. Hence, we had to wear multiple hats and perform different roles. This led to stress, decreased productivity, and eventually burnout.
However, as my business started scaling, I hired more people and tried to evenly distribute the workload and delegate tasks effectively. We even adopted various automation tools to take the unnecessary burden of routine tasks off our shoulders.
After everything we discussed in this article, you must have understood that starting a business is formidable, but sustaining in this competitive environment can be even more challenging. Especially when you start from scratch and with limited aids. But remember that, “Being challenged in life is inevitable but being defeated is optional.” Effective planning and smart decisions can save your business from any setback.
