4 Difficult Challenges Entrepreneurs Face, and How to Overcome Them
Starting a business has never been more accessible than it is today. With the proliferation of technology, the rise of e-commerce, and the wealth of information available online, aspiring makers can become entrepreneurs with relative ease.
The barriers to entry have diminished, but while the doors to entrepreneurship are wide open, the path to success remains paved with challenges.
Not long ago, there were gatekeepers that slowed the path of opening a business.
- Banks needed to loan you significant capital
- You had to know the right people to get started, like suppliers
- And you had to have some type of industry expertise, possibly from working for someone else for years.
However, the digital age has changed all that. Now, many of those gatekeepers have been removed.
Many businesses can be started online with very little capital. Expertise can be learned from a variety of online sources. And connections can be made virtually.
But while entering the world of entrepreneurship has become more accessible, it's crucial to recognize that the absence of gatekeepers and ease of entry, doesn't translate to guaranteed success. In fact, the Small Business Administration reports that 50% of small businesses only last 5 years.
Even if you aren't ready to make the leap to entrepreneurship today, it's time to start building the foundation of your future business.
For example, here are 4 challenges entrepreneurs face, and how to overcome them.
- Competition: With lowered entry barriers, the market has become saturated with businesses offering similar products and services. And it may take longer than expected for your business to take hold, while you try to stand out in a crowd.
- So be careful not to compare yourself to others. At the same time, your competition is also just trying to survive, and probably isn’t as smart as you think. Assuming you should copy them because that’s working for them, may be a mistake.
- Also remember, metrics like Instagram likes, do not equate to sales.
- So stay focussed on your own business, and what is right for you.
- Resource Limitations: While technology has reduced costs, businesses still require capital for growth, marketing, and operational expenses. Starting to build your capital early, will pay dividends later.
- Set up a separate business bank account as soon as possible, so you aren’t mixing business proceeds and expenses with your personal funds.
- Ensure your products are priced to cover your material costs, your labor, overhead and profit. For help with pricing see our blog The Art and Science of Pricing Your Work
- Skill Diversity: The breadth of skills required to run a successful business can be overwhelming. From marketing and finance to customer service and product development, entrepreneurs often find themselves wearing many hats.. I speak from experience, when I say be prepared to feel inadequate. And even when you start to understand one topic, the speed of technological change in every industry is staggering. It’s hard to keep up.
- But this can be overcome by investing the time now to gain the basic knowledge you’ll need later. For example, maybe you don’t need an accountant yet, but learning and doing your own basic accounting now, and setting up your bookkeeping systems, will give you a foundation you can use later.
- Learning to run small scale Facebook and Instagram ads now, will also set a good foundation for the future, when your marketing budget is more significant.
- Uncertainty and Risk: Entrepreneurship is inherently risky. Not all business ideas will succeed, and failure is a possible outcome. The lack of guarantees and stable income can be mentally and emotionally taxing.
- So using your time now to plan for various scenarios, will give you the confidence you need to move forward.
- For example, how do you keep your overhead low, while sales are still building?. How can you reduce variable expenses, like supplies? And if sales keep growing, can you use that to your advantage to buy larger quantities at a discount. Now is a great time to do some of that research, than waiting until you can barely keep up with production.
THE TOOLS YOU NEED TO SUCCEED
This increased competition, resource limitations, multi skill requirements, and the ever present risk of owning a business can seem daunting.
But so did learning your craft right? In the beginning, you didn’t have the knowledge you have now. But by watching videos, asking other makers questions, and trial and error, you made a skill for yourself.
A skill not everyone can do. A skill others will pay you to do for them.
So I promise, the challenges of starting your business are conquered. But just like your craft, you need the right tools.
Just like you’ve assembled the tools of your craft in your workshop, you need to assemble the tools of business, in your own small business.
- Personal Development tools like Resilience and Perseverance: Expect challenges and setbacks. Resilience is your greatest asset in overcoming hurdles and bouncing back stronger. And having a plan to meet those setbacks in advance, will save time and money.
- Business tools like a business plan. You probably already have a mental plan for where you want to take your workshop. So if you want to convert your workshop plan into a business plan, our free guide may help.
- Legal tools, like your business name, entity name, legal structure, how you’ll pay taxes and how you’ll control your accounting. These are critical to protecting your family's assets from any business liabilities, and to avoid any expensive penalties for non-compliance with state or local laws. Again, grab your free guide here
- And you're going to need marketing tools. Because if you aren’t making sales, it’s just a hobby, not a business, Marketing tools like
- clarifying your target audience
- understanding your unique value proposition
- crafting compelling storytelling
- creating persuasive copy
- creating consistent social media content
- and measuring your results.
In conclusion, the open doors of entrepreneurship have transformed the business landscape, making it more accessible than ever before. However, it's important to recognize that while entry is easier, success remains a challenging endeavor.
Entrepreneurs must navigate a complex terrain of competition, resource limitations, and uncertainty. By equipping themselves with knowledge, resilience, and a growth mindset, aspiring business owners can embark on the journey with confidence, knowing that while the path may be arduous, the rewards of perseverance are immeasurable.
To start building your Marketing knowledge now, you may be interested in our course, “GET NOTICED: Raising Awareness About Your Brand”.
Available at georgesupplyco.com, and clicking the “Courses' ' option on the toolbar, or click here
ABOUT THE AUTHORS
Scott Chervitz is the owner of George Supply Company, dedicated to helping makers grow their hobby into a thriving business. See more at GeorgeSupplyCo.com. You can reach him at Scott@GeorgeSupplyCo.com or on Instagram at @GeorgeSupplyCompany.
Brian Chervitz, M.S., is an Associate Instructional Designer at the University of Wisconsin Extended Campus.