Entrepreneurs face many challenges in today’s ultra-competitive business world; fortunately, contemporary times have also blessed entrepreneurs with more resources for tackling those problems than ever before. The following lists the challenges faced by entrepreneurs today, defines why each problem exists, and offers solutions so you can operate an efficient and successful business:
- Cash flow management
The challenge: Cash flow is essential to small business survival, yet many entrepreneurs struggle to pay the bills (let alone themselves) while they’re waiting for checks to arrive. Part of the problem stems from delayed invoicing, which is common in the entrepreneurial world. You perform a job, send an invoice, then get paid (hopefully) 30 days later. In the meantime, you have to pay everything from your employees or contractors to your mortgage to your grocery bill. Waiting to get paid can make it difficult to get by – and when a customer doesn’t pay, you can risk everything.
The solution: Proper budgeting and planning are critical to maintaining cash flow, but even these won’t always save you from stressing over bills. One way to improve cash flow is to require a down payment for your products and services. Your down payment should cover all expenses associated with a given project or sale as well as some profit for you. By requiring a down payment, you can at least rest assured you won’t be left paying others’ bills; by padding the down payment with some profit, you can pay your own.
Another strategy for improving cash flow is to require faster invoice payments. Invoice clients within 15 days, which is half the typical invoice period. This means if a customer is late on payment you have two weeks to address it and get paid before the next month’s bills are due. In addition, more and more companies are requiring immediate payment upon project completion – and in our digital age when customers can pay invoices right from their mobile phones, it’s not a stretch to request immediate payment.
You can also address cash flow management from the other side of the equation by asking your own vendors to invoice you at 45, 60, or even 90 days to allow ample time for your payments to arrive and checks to clear. If you can establish a good relationship with vendors and are a good customer, they’ll be willing to work with you once you explain your strategy.
- Time management
The challenge: Time management might be the biggest problem faced by entrepreneurs, who wear many (and all) hats. If you only had more time, you could accomplish so much more!
The solution: Make time. Like money, it doesn’t grow on trees, of course, so you have to be smart about how you’re spending it. Here’s how:
Create goal lists: You should have a list of lifetime goals, broken down into annual goals, broken down into monthly goals, then broken down into weekly goals. Your weekly goals, then will be broken down into specific tasks by day. In this manner, what is on your task list in any given day is all you need to do to stay on track with your lifetime goals
If any tasks do not mesh with your goals, eliminate it or delegate them
If any tasks do not absolutely have to be completed by you, delegate them
Consistently ask yourself: “Is what I’m doing right now the absolute best use of my time?”
parties you can lay the foundation for a long-term, mutually-rewarding client-boss relationship.
- Marketing strategy
The challenge: You don’t know the best way to market your products and services: print, online, mobile, advertising, etc. You want to maximize your return on investment with efficient, targeted marketing that gets results.
The solution: Again, if you’re not adept at creating marketing plans and placing ads, it’s a good idea to outsource your marketing strategy to someone who is. At this point, all you need is a core marketing plan: what marketing activities will you undertake to motivate purchases? Give your planner a budget and tell them to craft a plan that efficiently uses that budget to produce profits.
This is not the time for experimentation. You can do that later, on your own or with the advice of your marketing strategist, after you’ve established a baseline that works.
The challenge: You want to start or grow your business, but you have little capital to do it with.
The solution: There are many ways to earn funding, from traditional bank loans to family and friends to Crowd Funding campaigns. You can choose these routes, certainly, but I prefer the self-fuelled growth model in which you fund your own business endeavours.
Instead of trying to launch a multi-million dollar corporation overnight, focus on your initial core customers. Continually work to find new customers, of course, but consistently strive to be remarkable to those customers you already serve. Word-of-mouth will spread, and more customers will come looking for you. As they do, develop systems and business processes that allow you to delegate tasks without sacrificing quality. Your business will grow slow and steady, and you’ll be able to solve problems while they’re small.
Think about where you want to be five years from now. Can you get there without help, even if you have to delay growth a bit while you’re doing it? This is the best strategy to adopt for small business entrepreneurs. If you do feel you need funding, however, be sure to consult an attorney to make sure you’re not giving up too much of your business to get it.
- Choosing what to sell
The challenge: You know you could make a mint if you just knew what products and services to sell. You’re just unsure how to pick a niche.
The solution: Admit that you’re weak in identifying prosperous niches, and delegate the task to someone who is strong in this area. You don’t have to hire a huge, expensive marketing firm; rather, recruit a freelance researcher who has experience in whatever type of field you’re considering entering (retail ecommerce, service industry, publishing, etc.). Have them conduct market research and create a report with suggested niches, backed by potential profit margins and a complete SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats.
This isn’t to say you should have someone else decide for you; however, if you’re not good at identifying niches it’s a good idea to have someone who is make suggestions. You can then analyse the suggestions for yourself to determine if you agree. Taking this step now can save you a lot of time, money, and hassles later – and it can save your entire business and livelihood.
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