There are many challenges of entrepreneurship and you’re likely to face more than one. It can be difficult to start and grow a business, especially in today’s competitive environment. There are many things to consider when starting a business, such as the right idea, funding, and marketing to name only a few.
In this blog post, we will discuss some of the key challenges that every entrepreneur faces. We will also provide advice on how to overcome these challenges and succeed in your business ventures!
Delegating tasks is one of the biggest entrepreneurial challenges out there. It can be tempting to try to do everything yourself, but this is not sustainable in the long run. You need to assign task to other people so that you can focus on the most important aspects of your business.
One of the challenges that you might face when delegating is finding the right people to delegate to. It is important to find people who are competent and who you can trust to do the job well. Another challenge is letting go of control and trusting that the person you have delegated the task to will do it correctly.
Delegating Increases Productivity
One of the most important benefits of task delegation is that it increases productivity. When you delegate tasks, you are able to focus on the most important aspects of your business.
This allows you to get more done in less time. A study by the Harvard Business Review found that companies who delegate tasks have 32% higher productivity levels.
Another study found that employees who are given more responsibility feel more empowered and are more productive. By letting other people take on duties, you empower them to be achievers.
How to Delegate
Now that we have discussed the importance of delegation, let’s look at how you can delegate tasks effectively.
The first step is to identify the tasks that you need to delegate. Make a list of all the tasks that you need to do in order to run your business.
Once you have made this list, prioritize the tasks by importance. The most important tasks should be delegated first.
The next step is to find the right person to delegate the task to. Choose someone who you’ve seen deliver consistent results without needing micromanagement.
This should also have the time to complete the task on top of everything else they have to do. Once you have found the right person, explain the task to them and give them any resources they might need.
Finally, let go of control and trust that the person you have delegated the task to will do it correctly. This can be difficult, but it is important to remember that you would not have delegated the task if you did not think they were capable of doing it.
One of the most important skills that entrepreneurs need to master is time management. This is the ability to plan, organize, and prioritize your time so that you can achieve your goals.
There are many different time management techniques that you can use, such as the Pomodoro technique, time blocking, and the Eisenhower matrix.
The Pomodoro Technique
The Pomodoro technique is a time management technique that was developed by Francesco Cirillo in the 1980s. The technique is based on the idea that if you break down work into short, timed intervals, it is easier to focus and stay motivated.
To use the Pomodoro technique, you need to set a timer for 25 minutes and work on a task until the timer goes off. Once the timer goes off, take a five-minute break. After four Pomodoros, take a longer break of 15-20 minutes.
Time blocking is another time management technique that can be used to increase productivity. The idea behind time blocking is to schedule time for specific tasks.
For example, you might block off two hours every day to work on a project. During this time, you will not allow yourself to be distracted by anything else. This will help you to focus and get more work done in less time.
The Eisenhower Matrix
The Eisenhower matrix is a time management technique that was developed by President Dwight D. Eisenhower. The matrix is based on the idea of prioritizing tasks based on their importance and urgency.
Tasks are classified into four different categories:
- Important and urgent
- Important but not urgent
- Not important but urgent
- Not important and not urgent
Tasks that are important and urgent should be given priority as they need to be done immediately. Tasks that are important but not urgent can be scheduled for later.
Tasks that are not important but urgent should be delegated to someone else. And tasks that are not important and not urgent can be ignored altogether.
By using the Eisenhower matrix, you can prioritize your time so that you are working on the most important tasks first.
Another one of the biggest challenges that entrepreneurs face is achieving a work-life balance. This is the ability to strike a healthy balance between work and the rest of your life.
It can be difficult to find time for your family, friends, and hobbies when you are running a business. However, it is important to make time for these things because they will help you to stay sane and avoid burnout.
In 2019, software company RescueTime performed a study that revealed some interesting findings about the average employee:
- True productivity time is 2.8 hours out of the whole day
- Email and instant messaging apps are checked every six minutes
- Over 40% of the day is spent multitasking with email/IM/chat applications
- 26% of work that gets done occurs outside of normal business hours
- 21% of working hours are actually spent on social media, news, and other forms of entertainment
Other available information seems to indicate more of the same:
- Relationship satisfaction is significantly lower in women whose partners work over 50 hours weekly compared to those working 40 or less
- In 2014, the average work week for full-time employees was 47 hours
- In one survey, 19% of workers had to quit a job and 25% were at least once brought to tears due to stress
- 31% of employees miss three to six days of work per year solely due to stress
- Stress related to work causes 120,000 deaths in the US annually
Luckily, there are some strategies you can employ to reduce stress and create a better balance between your work and personal lives:
- Force breaks: Make yourself take breaks at set intervals, like ten minutes out of every couple of hours. While you may think that this is wasted time, studies have found that this actually boosts mental performance upon returning to work. Just be sure to completely disengage from work during these times.
- Compartmentalize: To the best of your ability, do not mix elements of your personal and work lives. For example, try not to work from your bedroom or take your work computer along with you on personal errands.
- Mandate vacations: Try to take a vacation at least once a year. This can be something as simple as a day trip somewhere in another part of your state/region. Completely immersing yourself in another environment will not only reduce work stress but it will help you engage better once you return.
- Set working hours: Work as usual for a couple of weeks while monitoring your times of peak productivity. Once you’ve established a baseline, make it a point to work these hours exclusively and consistently each day. It’s all about using your time efficiently.
- Airplane mode: If your position allows, try cutting off your phone for a few hours a week. If your position doesn’t allow, consider getting a new position. You would be amazed at how much stress this simple tactic can alleviate.
Deciding When to Act
Of course, the most difficult decision when it comes to entrepreneurship is when to actually take the plunge and start your own business. This presents a challenge for entrepreneurs because time is so fleeting and precious.
You could have the best business idea in the world, but if you wait too long to act, someone else will beat you to it. You’re never going to make the move if you are waiting for the “perfect moment.”
On the other hand, if you act too soon, you risk failing before you’ve even really gotten started. Becoming an entrepreneur in some cases requires 100% of a person’s available resources, which is a lot to potentially lose.
Leaving a Career Behind
For many people, the most challenging thing about becoming an entrepreneur is deciding to leave behind a steady paycheck and career. It can be scary to suddenly have no safety net, but that’s also what makes entrepreneurship so exhilarating.
The most important thing is to make sure that you have a solid plan in place before you take the leap. This means doing your research, knowing your market, and having a clear idea of what you want your business to achieve.
It helps if your household has another source of revenue coming in or if you can save up a nice financial buffer to provide for you while your new business is getting off the ground.
Again, if you’re waiting for the right moment, you’re always going to be waiting. If you’re worried about failing, remind yourself that even the most successful entrepreneurs have had their share of failures.
The longer you procrastinate, the more time you will have to come up with excuses to continue delaying action. As long as you research indicates your idea is viable, you should seize the opportunity for financial freedom sooner than later.
Yet another one of the most difficult challenges entrepreneurs face is raising the initial funds necessary to start their business. This can be a daunting task, especially if you don’t have any personal savings to fall back on.
If you’re not starting out with enough financial capital of your own, one traditional option is to apply for a business loan. Some of the many things you’ll have to take into consideration are:
- Loan amount: You’ll have to decide how much money you’re going to need and then hope the loan provider will give you that much. Do research on similar businesses to make sure your projected monthly income is going to surpass your loan repayment amount.
- Credit worthiness: Lenders are most likely going to look at your personal credit, your industry’s overall risk, your current cash flow, business age, and your debt-to-income-ratio. Brand new businesses have a hard time obtaining financing from banks.
- Interest rates: You’ll want to shop around to find the best APR from a reputable company. All bank loan interest rates are based off the Federal Reserve’s prime rate, which varies based on the state of the US economy. You can use an loan aggregation service to compare dozens of lenders’ offers at once.
- Loan type: Some types of financing include lines of credit, term loans, equipment loans, invoice loans, peer lending (crowdfunding), merchant cash advances, Small Business Association loans, and traditional unsecured business loans
- Loan fees: There will likely be extra costs to consider, like fees for loan origination, loan application, loan closing, wire transfers, credit line annual maintenance, late payments, referrals, underwriting, and early repayment – just to name a few. You’ll have to clarify this with your lender before you agree to anything.
Other Sources of Capital
If you don’t think you’ll be able to get a bank loan or simply don’t want to go that route, there are other options available.
- Home equity loans: If you own a home, you can use the equity as collateral for a loan. This is considered a low-risk option for lenders because they can seize your property if you can’t make the payments.
- Angel investors: These are wealthy individuals who invest in businesses in exchange for a percentage of ownership. They usually only invest small amounts of money, but they can be a great source of funding and mentorship.
- Family and friends: This is often the first place people turn to when they need money to start a business. It can be a great option because you usually don’t have to pay interest and the people who give you money are typically more understanding if things go wrong.
- Venture capitalists: These are firms or individuals that invest in high-growth businesses in exchange for equity. They tend to invest larger sums of money than angel investors and usually have more experience in the business world.
Establishing a Competitive Advantage
The competitive landscape in any industry is constantly changing. This means that, as an entrepreneur, you need to be always be on the lookout for new opportunities.
To establish a competitive advantage, you need to first identify your unique selling proposition (USP). This is what sets your business apart from the competition and makes it attractive to potential customers.
One of the best ways to establish a USP is to conduct market research. You want to focus on the needs of the customer and relieve any pain points they may have.
There are a few different methods you can use to gather this information:
- Surveys: You can create surveys and ask potential and current customers about their needs and wants
- Focus groups: You can gather a group of people together and have them discuss your current or potential products or services
- Secondary research: This involves looking at existing data that’s already been collected, such as market reports or industry studies
Improve the Competition
If you can’t take advantage of a brand new market, another option is to look for areas where you can improve upon what’s already out there.
This can be done by:
- Identifying the competition’s weaknesses and strengths
- Offering something that’s better or different than what they’re offering
- Focusing on a niche market that the competition is ignoring
- Creating a new product or service that meets a need that’s not being met by the competition
- Developing a better business model than the competition
Maintaining positive cash flow is one of the key challenges faced by entrepreneurs everywhere. If you’re not in the green, your business is not sustainable without outside funding, which costs money and may not be accessible.
It’s important to keep a close eye on your cash flow because it can have a big impact on the sustainability of your business. If you’re not careful, you could find yourself in a situation where you’re unable to meet your financial obligations.
One of the best ways to stay on top of your cash flow is to create a budget. A budget is an important tool that can help you track your income and expenses, as well as predict future expenses.
There are a few different methods you can use to create a budget:
- The 50/30/20 method: This involves allocating 50% of your income to necessary expenses, 30% to discretionary expenses, and 20% to savings
- The envelope method: This involves putting each budget category into a separate envelope, physical or virtual, and only spending the cash you have budgeted for that category
- The zero-based budget: This involves allocating every dollar of your income to specific expenses until you have a $0 budget
No matter which method you choose, the goal is to create a budget that works for you and your business. At the very minimum, you’re going to need to know how to calculate your future/current revenues, fixed costs, and variable costs.
To help you stay on budget, you need to track your expenses. The easiest way to do that is with one of the many money management applications on the market today.
Some of the most popular software options include:
Each software has its own set of features, so it’s important to choose one that meets your specific needs. For example, if you have a lot of inventory, you’re going to want software that can track that for you. If you need to invoice customers, you’re going to want software that can do that as well.
The bottom line is that there’s no one perfect solution for everyone. You need to find the software that works best for your business.
As an entrepreneur, you’re going to face many challenges. But if you’re prepared, you can overcome them. The key is to have a clear understanding of your business, your market, and your finances. With that knowledge, you’ll be well on your way to success.