The idea of being your own boss is something that most people dream about – but few achieve.
Before you give up the day job, you should make sure you understand the challenges that await you.
There are certain hurdles that entrepreneurs and small businesses must face before they can achieve success. This includes a wide range of issues, including the management of resources, finances, staff, and time.
A whopping 90 percent of startups fail. That means only one of out every ten ventures pan out. Though, that’s across the long-term. Nearly half of new businesses will last five years or longer. Either way, the numbers are not in your favor.
What’s the reason for such as high failure rate? Some believe it’s due to unrealistic expectations. Others believe it’s a matter of luck. Though, it’s likely a combination of factors.
So, if you want to be the one that succeeds, take a moment to explore the top challenges that you’re going to come up against.
Being Able to Look at the Big Picture
In order to be a business leader, you need the right mindset. This means being able to look at the big picture.
When you focus on immediate results, you’ll rarely get the results that you want. And, you’re more likely to get scared over minor setbacks.
Looking at the big picture also means having focus and vision. You’ll know where you want to take your business and be able to define the steps that it takes to get there. You’ll be able to make better judgment calls and create a more meaningful business.
So, how do you start thinking big? You’ll need to start using consequence-based thinking.
The concept is that if you base your decisions on consequences instead of situations. You don’t look at your current situation, you look at how your actions will impact the final results.
Learning to Deal with the Unknown
Of course, looking at the big picture also helps you deal with the unknown. And, there are plenty of unknowns in the business world.
If you can’t control your worry over the unknown, you’ll never be able to make decisions with clarity. You’ll second guess every move that you make.
So, how do you prepare for things that you can’t predict? A successful business should always plan for multiple outcomes. It’s the same with investing. You don’t put all your eggs in one basket. Don’t lay all your ambitions on one perceived outcome.
When you make predictions, use a high-end and a low-end estimate. Do this for all calculations. You want to be prepared for the worst and be satisfied with the outcome.
Finding the Right Products to Sell
Finding the right product doesn’t always come easy. You might find that you have a great idea for a product or service, only to find that people prefer another of your ideas.
You should be prepared to try different products or services. Don’t be surprised if your flagship product ends up being a dud while a backup plan ends up succeeding. Ride out these successes and build upon them.
Finding Customers and Keeping Them
Along with finding the right products, you’ll need to find customers – and keep them. Customer acquisition generally costs more than customer retention. In fact, it may cost five times as much to get a new customer compared to keeping one. So, you’ll want to overcome the challenge of being able to keep your customers.
Customer retention is mostly about two aspects – delivering a quality product or service and listening to the interests of your customers.
If you built it, and they like it, they will come back for more. But, you also need to pay attention to their feedback for future product development.
Social media sites provide a simple solution for gathering feedback. Search for mentions of your business and look at what people say about your products or services. Use this input as a form of free market research.
Become a Master of Time Management
The next hurdle is time. When you run a business, you’ll find that you’re always running out of time. You could easily end up spending your entire day devoted to your business.
Proper time management is a learned skill. It requires repetition and planning. One of the biggest time killers is distractions – including smartphones and social media.
It’s known that productivity decreases due to these distractions. So, to control time, you need to get rid of these distractions.
Keep the social media apps off of your smartphone and use it solely for business use. You can do the same with computers. You just dedicate devices to work and other devices for personal use. The two should not cross.
Learn More About Finance Management
Financial management is just as important as time management. You need to learn to manage your cash flow. This presents its own challenges, one of which is invoicing.
If you don’t send invoices you won’t get paid. Using book-keeping software, such as Quicken, make it easy to stay on top of invoices. So, there’s no excuse for sending out an invoice later. You wouldn’t want your clients to be late with their payments.
Along with invoicing, you’ll need to pay close attention to budgeting and planning. You shouldn’t make important financial decisions without reviewing your books. Plan things through, make predictions and prepare for multiple outcomes.
Abandoning Your Previous Career
The last challenge to consider before you start creating your business plan is the actual process of abandoning your previous career. At some point, you’ll need to cut the cord and set yourself free.
It can be a scary step, but it’s the final step in becoming your own boss. You’ll eventually reach the point with your own business that you can’t divide your time between both jobs.
Wait until your business is moving along steadily and things are looking up. But, don’t hold off the perfect time because it will never appear.
That covers some of the main challenges that you’ll likely come across while trying to make your business a success.