If you are thinking about starting your own business, you‘ve probably heard by now what a challenging and daring venture it may be, with no guarantees of success.
No matter what your motivation is – a great business idea that you want to bring to life, or a flexible job you want to build for yourself, the very thought of taking the first steps in that direction can, indeed, feel intimidating.
However, don’t let the hurdles of starting your own business paralyze you and stop you from trying to achieve your dreams. Here are the most common ones to prepare for, together with tips on how to overcome them.
Learn to Live With Fear
The fear of failure will stalk you.
It will be there from the very inception of your business idea, through the early start-up phase, and then again when you’re making plans for scaling and growing your business. You’ll be afraid that you’ll make a wrong decision, run out of money, lose your clients, or invest in a product that you’ll have no market for.
The first thing to learn is not to be afraid of your own fear. As more than 70% of startups fail within the first 10 years of running a business, your fear is well-founded.
And if you listen to your fears, they can teach you lessons on survival. The fear can motivate you to learn how to overcome the challenges, and achieve even greater success.
Find Your Own Right Timing
You need to be aware that such an enterprise will consume all your energy, time and money for a couple of years to come. That’s why it is of crucial importance to determine whether your personal timing is right, as it is one of the most important factors of your future business success.
Try to be realistic about being able to devote all your resources to your business idea.
As during the early phase, and until your business is steady, this can mean working from 60 to 80 hours a week, you will need to sacrifice a lot of your private time, that you would otherwise spend with your family. Furthermore, are you ready to invest your personal funds and be financially unstable for a while? What about your professional resources? Do you have enough knowledge, experience, and skills to reach your goals? Or you could use some time to brush up on your expertise?
However, don’t get caught in the trap of so-called analysis paralysis, as overthinking can destroy your willpower. When you’ve given these questions a thought, make your decision, and move forward.
Do Make a Plan
New businesses fail for several reasons, and you can avoid some of the most common pitfalls if you approach your business planning thoroughly.
Research shows that most of the 42% of small businesses go under as they had no market for the service or the product they’re offering. In most cases, this could be avoided by serious planning – getting to know the target audience as well as the competition and testing the business idea in real face-to-face conversations with prospects.
Your business plan will help you get a better idea of whether you’re a business idea is viable, how much funding you will need and what actions you need to take in order to achieve your goals. It will be your guide when things get rough, or whenever you’re in doubt.
Don’t Be Afraid to Outsource
In the early days of starting your business, you will naturally want to save money, and use it only for the necessary purposes. Try to set your priorities right, as taking up tasks you’re not very skilled at, or that you can hardly squeeze into your daily schedule, can bring some undesired and costly consequences.
To prevent the loss of your time, money and energy and all the possible complications consider getting professional support from the moment you start a company.
Except for the matters of choosing the right structure for your business and company formation, it’s crucial that you get expert advice in the areas such as:
- financial analysis of your business plan,
- various funding options,
- deciding on the best accounting software to use,
- making sure your accounting procedures adhere to the latest requirements and regulations,
- separating your private and business expenses,
- bookkeeping and filing taxes etc.
Having professional support early on can help you avoid many problems later on, and minimize some of the most common risks.
Manage Your Cash Flow
82 percent of businesses that fail, fold due to the poor cash flow management. In order to keep your business safe, you need to know how to keep your cash flow positive.
The calculation couldn’t be more simple – you need more money coming into your business than flowing out of it, on a monthly level. This way, you will be able to pay your expenses when they are due. If you’re unable to do so you will run out of cash to finance your business operations.
However, if you’ve made your financial plan thoroughly, and have a yearly cash-flow forecast that is based on real historical data, your predictions will be more accurate, and you’ll be prepared for the possible challenges.
When you hit a rough patch, there are still some things you can do to maximize your cash flow, such as:
- avoiding impulse spending,
- invoicing promptly and trying to close the gap between invoicing and payments,
- incentivizing your key customers to pay earlier,
- reducing operations and overhead costs, etc.
The more you know about the hurdles that are expecting you, the greater your power to jump over them will be. Try to create your own support network and to connect with the other business owners. Hearing their first-hand experiences can be invaluable, as well as the support you can give to each other along the way.