11 Challenges Entrepreneurs Face and How To Overcome Them
Updated November 30, 2022
Starting a business is full of exciting challenges and potential learning opportunities gained from the risks that come with it. Understanding these unique obstacles may prepare professionals to handle them if they encounter any as they start a business. In this article, we explore 11 challenges facing entrepreneurship and how an entrepreneur might overcome them.
11 challenges facing entrepreneurship
Here are 11 challenges that entrepreneurs might face and how they might approach them:
1. Selecting a service or product
An entrepreneur may have the skills and passion to start a company, but one important factor in starting a business is deciding what to sell. To start, they may identify a demand in their community they could meet. A marketing firm or freelance researcher may help them conduct market research to discover what needs there are and which ones they have the resources to address. For example, an entrepreneur may learn that the people in their community drive out of town to get massages, so they know there is a local demand for a spa that they could fill.
2. Developing a sales strategy
Though an entrepreneur may recognize an opportunity in a certain community, they might also research the best way to sell to that community. They may hire a professional to create a marketing plan or make one themselves. To do this, they can assess who their target audience is and what strategy might best reach them. For example, if an entrepreneur opens a business in a rural community where they know many people listen to the radio, they may develop a digital ad to broadcast locally.
3. Establishing starting funds
For entrepreneurs who start with lower capital, there are ways to earn funding to get started. They may begin with a traditional bank loan or a federal small business loan. If they plan to provide a product or service that they know has significant demand already, they might start a fundraising campaign. For entrepreneurs who would rather use a self-fueled growth model, they may start by targeting a small audience and slowly building to serve larger client bases.
4. Maintaining a budget
Because running a company can be unpredictable, an entrepreneur can stay prepared by carefully maintaining a budget. They may do this by prioritizing efficient marketing strategies and allocating the rest according to their unique needs. Assessing which expenses are necessary may help entrepreneurs adjust their funds to better prepare for changes. For example, they may observe that there is a more affordable manufacturer they can use and reallocate those savings to address higher utility costs.
5. Sustaining revenue
It's important for entrepreneurs to manage their organization's money carefully to account for any potential delay in invoice payments. Aside from budgeting, entrepreneurs may charge a down payment to ensure they can afford expenses until they receive full payment. By sending invoices as early as possible and requesting payment as soon as they complete projects, entrepreneurs can secure funding to keep operations running efficiently.
6. Staffing the organization
To make sure that they hire people who care about their organization's mission and will work hard, entrepreneurs may oversee the hiring process. They may publish highly detailed listings to attract candidates whose qualifications match the organization's specific needs. Before interviewing anyone, they can develop questions to assess if the candidate might be a good fit for their organization and if the role can help them in their career goals.
7. Managing employees
As the creators and leaders of an organization, entrepreneurs guide their employees on how to best carry out the organization's goals. They can achieve this by developing clear, detailed instructions for each role. When an entrepreneur effectively communicates the goals of the organization, employees may better understand what they expect and what they're working toward. For example, if the founder of a clean water initiative tells employees the story of why they started the company, they may feel more inspired to work toward the common goal of providing clean water.
8. Expanding the business
After an entrepreneur establishes their business, they may reach a level of success where they want to expand. This stage of managing a business entails many considerations, including figuring out a way to address greater demand, researching new partners and reassessing their role in the company. An entrepreneur may revise existing processes to better meet the company's needs. For example, if a consulting firm uses software built for a smaller client list, they may upgrade to one that betters suits a wider client base.
9. Managing time
Starting a new business and managing it creates many periodic tasks, so entrepreneurs may create deadlines to help with prioritizing their obligations. Because their role can encompass many responsibilities, entrepreneurs have several approaches they can take to manage time. One strategy they can use is creating goals for themselves and others in the organization. They may assess which tasks are absolutely necessary and which they can delegate.
10. Maintaining confidence
It can take a lot of confidence to start a company and just as much to run one. It's important for entrepreneurs to maintain confidence so they can lead effectively and make appropriate business decisions. Entrepreneurs may set long- and short-term goals to track and reflect on their success. Keeping a community of supportive leadership and employees may also help. When an entrepreneur is more confident, they may feel more prepared to address challenges.
11. Collaborating with partners
For entrepreneurs whose organization is doing well, they may consider partnering with other professionals or businesses. Though this may help them allocate leadership responsibilities and increase funding, there are many considerations. First, entrepreneurs can assess areas of improvement, whether a partnership might help and also how their skills and personalities might combine to benefit the organization. It's important to establish the terms of the partnership with a lawyer to protect all parties' interests.
Explore more articles
- What Is Gross Annual Income and How Do I Calculate It?
- 8 Positive Ways To Lead by Example in the Workplace
- How To Find and Remove Circular References in Excel
- How To Change Margins in Google Docs (3 Easy Methods)
- 50 Statistics Terms To Know (With Definitions)
- How To Write a Sick Out-of-Office Message (With Examples)
- 80 Examples of Enjoyable Activities To Do After Work
- How To Be a Successful Content Creator in 9 Simple Steps
- Accountability in the Workplace: Importance and Tips for Improving It
- 10 Behavioral Health Certifications To Consider
- 29 Helpful Customer Service Phrases
- How To Create an Editable PDF From a Word Document (Plus Tips)