Starting Your Business
In the beginning, there is always great enthusiasm for starting a new business! It always sounds like a positive move, and it can be, but not without appropriate planning. Having great strategy is critical to preventing the new business from falling apart within the first few years of opening the doors.
In Part 3 of George Black’s book: Dear Mr. A ~ letters revealing the secrets of an entrepreneur he provides entrepreneurs a step by step strategic process called The Next Level NavigatorTM. Every business needs to know where they are headed and this is an easy process to follow in developing great strategy.
The initial few years of an entrepreneurial endeavor often determines whether it will fail or succeed. So, it’s important for the entrepreneur to anticipate possible hurdles and ways to overcome them.
The following lists 5 frequent hurdles with overcoming strategies:
#1. Nobody Knows about your New Business
You have spent all this time building and launching your business and nobody shows up. No customers! This feels like the ultimate rejection, but it may simply be that you have not promoted your business very well.
A strong marketing and sales strategy must be a part of your overall strategy, and it should begin months before you “open the doors” – whether you are virtual or bricks and mortar. In today’s world, it is easy to get started through social media, but it’s a jungle out there. See our 3 blogs on social media beginning with our lead blog: Achieving a Winning Social Media Strategy.
#2. Depletion of Cash
One of the biggest hurdles a new business will face is keeping the cash flowing through the early years. A huge number of businesses fail due to underfunding, even though they may actually be successful selling their product or services.
It’s important to start cash flowing from Day 1. Selling is important, but collecting is even more important. And, do it as quickly as possible. In the beginning, quick cash flow is more important than high profit margins. Cash from sales stretches any capital funds you have raised.
When raising capital for a new startup be certain to include 6 – 12 months of working capital as a safety net. Working capital is basically the bare bones monthly budget required to keep the new business open. Sources of funding may be investors to banks to family and friends, and possibly crowdfunding. See our 2 blogs on “is crowdfunding worth it?” for more insight.
#3. Powerful Competition
Another hurdle that a new business may unfortunately encounter is powerful competition that can be very destructive. Competitors with deep pockets can outspend, outmarket and outflank newer and smaller companies. Large corporations may crush small businesses.
Ever heard of David and Goliath? Sun Tzu wrote: “Know your enemy and know yourself and you can fight a hundred battles without disaster.”
Knowing yourself can help you differentiate from the “goliaths”. Part One of Dear Mr. A guides the reader in understanding themselves which is key to great strategy. Great strategy helps you outmaneuver the lumbering “goliaths” before they even know it.
#4. New Hires Don’t Work Out
Finally, staffing problems may occur in the beginning for a struggling business. They often occur because the business has limited resources and experience in hiring and keeping the right people. When a new hire does not work out it is always disruptive and costly in lost time, money, and even more pressure on the remaining team. Typically, when hiring a replacement there is little time or money to invest in a thorough interview.
But, you must! A new business usually can’t afford to outsource hiring. You can hire them yourselves, if:
You spend the time to thoroughly know your best candidates over multiple interviews in a variety of settings. You will be surprised what you can learn.
Plus, spending some money on a few personality profiles really helps, because the profiles will ask questions you never would.
#5. Disappointment, Discouragement, Despair…
No matter how positive one may be, entrepreneurs are highly likely to have moments of disappointment, discouragement, or despair, even if they occur in private. Not everything goes straight up. There will be setbacks.
How you handle them is so very important to the future of your enterprise. In fact, it’s best not to let others in the company know of these personal moments. Instead, an entrepreneur needs to have a close ally or 2 outside the business and his family to whom they can confide and receive encouragement.
At Intigro, we call this Executive Caddying, others call it business coaching. Regardless, when you’ve had a bad “round of golf” in your business, you need someone who knows you to help you reorient back to your great strategy, make adjustments, hit some “practice shots” and get back out there.
How to Start a Business Right
“In preparing for battle I have always found that plans are useless, but planning is indispensable.” ~ Dwight D Eisenhower
Great strategy is indispensable in starting a new business! For once you launch your endeavor, it is like battle, you have no idea what will happen. Avail yourself to good advice, learn from the mistakes of others, and avail yourself to entrepreneurial resources – many of which are online, like the Intigro blog.
We love stories and would like to hear from you!
Obviously, there are no guarantees of success; however, if you do the above, your chances for success are improved.
Why not tell us about your own hurdles and how you overcame them? Please do so, either in the comments below, or by submitting a guest post to us. We review these posts carefully, and as long as your contribution adds something to the entrepreneurial community we’d be happy to feature it on our site with a link back to yours!