Many people want to start businesses, which is why there are more than 30 million small businesses in the U.S. alone. Yet, too few people anticipate the problems and challenges they’ll face as entrepreneurs. Instead, they assume their golden ideas and innovative solutions will carry them over obstacles and into unicorn-level success. Although I admire their gutsy spirit, I caution against ignoring issues commonly faced by owners and inventors.
This doesn’t mean you can’t operate with passion and optimism. You can, and you should. At the same time, though, you should consider the seven biggest challenges small business owners face. Four fall in the internal category, and overcoming them happens between your ears. The other three challenges entrepreneurs face when starting a business occur externally, but they can be mitigated with thoughtful, thorough planning.
Internal Challenges Faced by Entrepreneurs
What’s the first stumbling block you can expect to encounter? Fear.
Of course, fear also happens to be a terrific motivator. Nonetheless, it can also become a source of paralysis and anxiety. Take COVID-19 fears as an example. The pandemic has sent leaders straight into fear mode (and even panic mode). Covid-19 shutdowns have no historic precedent, so it’s hard to know what to do as a business owner. This is where amassing knowledge becomes essential.
I’m a firm believer that the antidote to fear lies in education. The more you know, the more comfortably you can make bold choices. Certainly, it can be tough to read about a global epidemic — but you’ll be better off knowing how other companies are handling the crisis.
Let what you learn guide you in everything from pricing decisions to the way you sincerely connect with employees, vendors, and customers. At the same time, seek out a mentor to help you handle your emotions. Mentors share life lessons, which helps you put your own situations into perspective and reduces your natural fight-or-flight responses.
Two other internal challenges faced by entrepreneurs include letting work overwhelm you and thinking everything is important. These are easy traps to fall into; one time, I turned my attention and energy squarely on building a brand. Why? I worried my business would fail, meaning I would also fail in my duties as a loving provider. What happened? The brand dominated my world and my family suffered because my priorities were out of whack.
The solution to these two challenges faced by entrepreneurs is to prioritize your tasks from most to least critical. Map out your days, weeks, and months by categorizing each piece of your puzzle. When necessary, delegate nonessential or less important items so you can truly focus on what matters. Use some kind of tool to keep you on track, whether it’s a paper planner or an app on your phone.
With practice, you’ll find that your focus will inevitably change. Sometimes, your personal life will require more attention; other times, business duties will call. Roll with reality and don’t force yourself to be in one place when you should be in another. Otherwise, you’ll never be able to give 100% to what’s in front of you.
What’s the final internal snag business owners encounter? Adopting a lone wolf mentality. We’re inherently social creatures and need one another. Build an all-star team by networking with winners who are driven to make a difference — just like you are. These are your guides, and they’ll keep you anchored with their foresight and experience as you traipse into unknown (albeit exhilarating) territory.
External Challenges for Small Business Owners
Now, let’s talk about the biggest challenges entrepreneurs face on the external side. It’s no surprise that lack of finances heads the list. We’ve all heard the statistics that the vast majority of startups fail to make money quarter after quarter. Don’t confuse success with profitability, though. Just because you’re not rolling in excess cash doesn’t mean you’re doing poorly, as long as you’re not undercapitalized.
Securing enough capital is essential, especially among young founders with student loans and no nest eggs. However, this isn’t an insurmountable hindrance. From online crowdfunding options to borrowing from loved ones or wooing investors, entrepreneurs have a few options to avoid going broke before they can generate momentum.
The second external challenge is a seeming lack of resources. When owners complain that they don’t have the resources to sustain their businesses, I often reply that when I die, I want the word “resourceful” written on my tombstone. Being resourceful means digging up hidden resources to realize your dreams. You have to be creative and think way outside the box. If you’ve built strong personal connection connections and have tried to learn something new every day, you’ll be in a position to unearth resources that others overlook.
The final entrepreneurial challenge typical in startup culture is basic mismanagement. Typically, mismanagement behavior comes from being all over the board and not having well-considered strategies in place. When you’re blasting a shotgun instead of relying on a rifle, you can’t predict the results — and that’s bad for business. Again, lean on the folks you trust to help you supervise, negotiate, and plan with precision and careful consideration.
Becoming a business owner has its ups and downs. Anticipate the challenges faced by entrepreneurs and you’ll be buoyed — and overjoyed — by the rewards. What business challenges have you faced in your entrepreneurial journey so far? Let’s talk! Just fill out the form on my homepage or reach out to me on LinkedIn, and we’ll get connected.