Building a Business? Here Are 4 Common Challenges You'll Likely Face Along the Way When launching a startup, knowing where the hurdles are makes it much easier to clear them.
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It's no secret that startups face many challenges, especially in the early stages. And while those speed bumps might be a natural part of any business-building process, they can sometimes pose a serious threat to stability, wreaking havoc that undermines the brand and makes it much harder to build a sturdy foundation for the future. For many small business owners, those challenges prove too much to overcome, with about half of SMBs shutting their doors in just the first five years.
But while that may seem pretty bleak, it doesn't mean you or your SMB should throw in the towel. Many business problems are fairly common and manageable, particularly when you're knowledgeable and prepared to meet them head-on.
Here are some of the more common issues new companies face in those critical early stages, as well as some advice on addressing those challenges and mitigating the fallout.
Related: The Complete, 12-Step Guide to Starting a Business
Finding the right people
It's one thing to have a good idea, but another to turn that idea into a viable, self-sustaining business model. To build something with any chance of success, your business needs the buy-in and hard work of people who share your vision and have the talent to get you there. Even in the best of times, finding those people and keeping them on board can be a costly, sometimes even futile endeavor, posing a serious challenge for your operation.
While creating a great team can be difficult for SMBs, there are ways to limit common recruiting issues and strengthen the personnel backbone of your business. For instance, creating ideal candidate personas for each role (sales, production, customer service) can infuse the hiring process with more predictability, producing talent templates that deliver stronger, more consistent candidate leads that better match your needs.
Personalizing hiring and eliminating obstacles and redundancies during the training process can also help make the new hire transition much easier. This results in a powerful and positive first impression on qualified candidates that can boost brand reputation and employee retention.
And when it comes to attracting and retaining the best talent, there's no substitute for company branding. Beefing up your employer brand can help build the recognition and trust that attracts people that share your values and want to be a part of what you're all about.
Related: 5 Expert-Backed Strategies for Hiring Top-Quality Talent for Your Startup
Creating an efficient workflow
For SMBs, having the right team in place is essential. Just as crucial is creating processes and supplying the tools teams need to deliver the goods and make customers happy consistently. But with so much to focus on each day, it can be challenging for business leaders to continually tweak and optimize in-house processes and manage an efficient workflow that keeps costs down while maximizing daily output. And as things scale up, so does the challenge of keeping things in line.
Fortunately, there's a way to identify process issues and power up productivity without derailing your business: enabling employee feedback. Creating opportunities to provide feedback, point out problems and offer solutions doesn't just cultivate employee buy-in regarding process and productivity. It also allows you to spotlight and address issues quickly, eliminating redundancies and preventing problems before they become budget-draining nightmares.
Employee surveys, regular one-on-one meetings, team debriefings and open communication policies allow employees to share honest, constructive feedback with management. When these channels are available and feedback is encouraged, workflow problems become much easier to identify, correct and prevent in the future.
Related: 7 Time Management Strategies for Busy Entrepreneurs
Building a customer base
All businesses must constantly work to find and attract customers. But without the brand recognition, market presence, or spending power of more established companies, SMBs tend to have a much tougher time getting the word out. Even in an uncrowded industry, startups must figure out a way to reach and retain customers from scratch, a challenge that can test the budget and mettle of business owners everywhere.
So how do you build a customer base without stretching yourself or your marketing spending too thin? Instead of throwing messaging at the wall and praying that something sticks, it's best to build a strategy that targets the right audience at just the right time. And that starts by defining your ideal customer personas.
Though not perfect, customer personas provide a much clearer picture of your target buyers, their spending behaviors, and which online platforms they use the most. Creating such personas at the outset allows you to craft content and an approach with maximum messaging impact, enabling you to specifically target the likeliest buyers in the right channels while getting more from your marketing dollar.
Targeting customers through buyer-centered marketing helps reduce the uncertainties that commonly haunt new business outreach efforts. It takes the randomness out of the equation, using focused methods to reach interested buyers and build a customer base to help sustain your operation, particularly during such a pivotal point for your brand.
Related: 3 Simple Tips for Finding New Customers Using LinkedIn
Managing SMB finances
Like any company, it takes financial resources to sustain and grow a small business. Unfortunately, accessing the cash flow or capital often needed to keep the lights on can be a major challenge. And because acquiring loans and outside investment tends to come with its own set of obstacles, business owners must often manage things on a very limited budget, keeping the company running with very little to bridge the gap.
Running a business on shoestring funds isn't easy, but implementing smart budgeting practices like data-based cost-cutting, focused cash-flow management, and bookkeeping management can be invaluable when money is tight.