Challenges Entrepreneurs Face when Starting a Business (Lessons from Top Brands)
If you’re an entrepreneur, no matter whether newbie or experienced, you already know that barriers to entry in business are inevitable. And it's common in any field around. The question is-
How to properly handle those challenges and how do successful businesses do?
In this article, we have discussed some common barriers to entry in the small business industry with effective solutions from top successful companies across the globe. Don't forget to check to last part! Let's dive into the details.
7 Challenges Entrepreneurs Face when Starting a Business
Barriers to Entry in Business are countless. Here we have chosen 7 basic and unskippable barriers-challenges. Also, we have discussed how could you solve them.
Challenge 1: Funding
This is the first crucial and inevitable situation for a startup. You can never run a company without a healthy amount of money. So, how would you collect your money?
How to Get Funding for a Business Idea
You can manage your capital from several sources like Family Members, Friends, Bank Loan, Venture Capital, Angel Investors, etc. And the most effective and strategic way, for now, is Crowdfunding.
Remember that when you are urging for money to venture capital or and bank, they will not agree to give you the big amount until you describe where you are going to spend the money and how this will get back as revenue as the multiplied amount.
That's not done having a handful of money for the business. you have to spend it wisely to get the best out of it.
Challenge 2: Lack of Business Knowledge
It’s common to think that starting a business is easy. But when you don’t have proper business knowledge then the real scenario is a bit different than everyone thinks. By 2019, we all are acknowledged and do agree that entrepreneurs are not born, rather they are made.
And what things make an entrepreneur a successful one? It’s real-life business knowledge. Not necessarily everyone should come from a business background but they can gain the knowledge and experience day by day.
How to Deal with Business Knowledge Problem
Invest your time before money
When you are a beginner, spend most of your time by learning. This learning phase depends on the dedication and experience that you may already have.
And to learn, you must use the online resource as well as books, podcasts, online courses, research paper, etc.
You also can follow some successful business owners, writers popular business magazine such as Harvard Business Review, Forbes, Inc., Fortune, The Economist, etc.
Besides these, if you want to explore things more practically, get in touch with a mentor.
💡 Bonus Tips
Work in a startup for a certain time before starting yours. This will give you the hands-on experience and this is the best ever method to learn anything.
Challenge 3: Competitor Analysis
Most of the entrepreneurs don’t know-understand the necessity of competitor analysis and how to do it. But when you don’t know who is minimizing your sales by snatching your customers this can be a great threat to your business.
In fact, sometimes the aftermath of analyzing competitors and always keep an eye on them can help you to convince investors about the possibility that your business is going to get bigger in the near future.
How to Do Competitor Analysis
But for the marketing or business strategies and all types of updates, you can do scrupulous research on their website, social channels, and newsletters.
Challenge 4: Quick Decision Making Paralysis
This is one of the best practices that entrepreneurs always avoid. In everyday life, we are taking a lot of decisions which is yearly at around three billion.
And one of these decisions can either exterminate your business from the game ground or can take you to the zenith of success.
So prompt and smart decisions are ahead of the curve to take you there.
How to Deal with Decision Making Inability
This is not going to happen overnight. You need to keep practicing ceaselessly. Rather than a skill, this is more of a personal trait.
So here's no such tool to improve, on the other hand, you have to work harder and follow some strategies.
- Don't show why it's the best. Look for what worst can happen to exterminate and then find another option
- Have strong contingency plans against failures
- Learn from others' failures and from exemplary leaders
- Keep track of all your decisions and outcomes
- Get others' perspective and value their decisions
- Always there will be a certain uncertainty and doubt until you see the result. But what you can do is enjoy this uncertainty
- Finally, admit to yourself that you could be wrong and learn from it
Challenge 5: Failure to Pick up the Right Technically
Nowadays you can never avoid the help of technology. No matter your business types, from tangible to service providing business you must have to use technology for anything like marketing, developing the product.
And in this situation, if you don’t have the basic technical knowledge, you might lag behind from your competitors.
- Enroll in online and offline technical courses
- Read technical books and articles
- Ensure your online presence
- Have your personal or business website and manage
- Use technical tools for your daily life and work
Challenge 6: Entrepreneurial Mindset
Entrepreneurs who are successful are also competitive minded. This doesn't sound like a threat, but some are scared to fail. On the other hand, you can not be successful by skipping failure. Their mindset should be strong enough to embrace the failure to along with the passion and hard work.
There're more psychological barriers to entry in the business that entrepreneurs face. And here I got some strategies to overcome these.
- Identify your self-doubt and work on it to boost up your confidence
- Be curious and always try to learn something
Challenge 7: Prescience the Business Value
When an entrepreneur is able to have foresight about the future of the business, it creates a great scope to survive the business. For instance, if the entrepreneurs don’t know the possibilities that can happen in the next 5 years, it would be tough to plan the contingency plan. But when you know things get easier for you.
- Know the recent trends and how it can be evolved in future
- Have strong knowledge about your profession to presume the future patterns
- Level up your skill gradually by taking small decisions
But not all entrepreneurs have strategic and foresight minds. In fact, most people think the average. And this is not a thing that will grow overnight. It requires the ceaseless practice of a long span of time.
Learning from The Successful Brands
KFC: Struggle and Success
At the age of 6, a little boy from Henryville, Indiana, lost his father and became the only responsible being to take care of his younger brothers and sisters. Burdened with all the hardship and destitution, he took up numerous jobs, from being a farmer to a vehicle conductor, railroad fireman, and insurance salesman.
One has to remember that every failure can be a stepping stone to something better
Who would have thought that this kid, Colonel Harland David Sanders, would one day grow up to be the founder of one of the most successful brands in the history, the world’s largest chicken fast-food chain KFC?
After switching a significant number of jobs and work roles, at the age of 40, he was still running a small service station where he used to feed exhausted & hungry travelers who sought his help.
After years of cooking, traveling and making deals all over the country, the franchise sales eventually started to grow and at one point, with more than 600 franchised outlets he sold his shares for a hefty $2M to investors.
Now let’s have a look at some of the most inspiring success stories of two giant players in the current E-Commerce arena.
Alibaba & Jack Ma
It all started in a small apartment in Hangzhou, China. One of the most common characteristics of any immensely successful start-up lies in its vision.
Thinking way ahead of the predicted trend and being able to discover untapped market always provide the upper hand when it comes to business. A small group of 18 people, led by one man, did exactly what the time demanded. They started the next big online retail platform, Alibaba, led by Jack Ma.
With the sudden mass access to the Internet, Alibaba launched Taobao.com, the Chinese version of eBay timed perfectly enough to form what Jack Ma calls ‘Iron Triangle‘ of E-commerce, logistics, and finance – naming Alibaba, China’s largest courier service clusters and AliPay.
Started in 1999, it now holds the market capitalization worth $150 Billion+.
Amazon's Struggles to Be the Best
Again, this success story is all from a boy with a rough childhood, hard early days and hence a relentless urge to prove himself to the world.
Growing up with financial constraints, the valedictorian of his class and a graduate from Princeton became one of the wealthiest people on earth, with a net worth of $153.2 Billion, the founder and CEO of E-Commerce giant Amazon – Jeffrey Preston Bezos.
Similar to Alibaba, Amazon began to expand into all categories by taking a perfectly timed advantage of the growth rate of web usage, numerically 2,300% per year.
From selling only books, Amazon started to sell music and videos. Jeff Bezos reportedly sent out an email to his customer base, asking them to list things that they may prefer to purchase from Amazon.
Receiving an extended list including items of all sorts, he decided to expand in a wider scale, resulting in Amazon selling almost everything as of today – from essential household commodities & groceries to consumer electronics & apparel.
Final Thoughts on Barriers to entry in Business
All these are the major barriers for an owner to entry in business. But it’s also easy to overcome if you follow the precaution and have faith in yourself.
Know that not any challenge is a challenge if your mindset is ready to fight.