Too many start-up enthusiasts consider launching a new company as a random walk into a business field. However, when it comes to turning the idea into concrete results, they come across a host of barriers to initiate their business. Though rewarding, all of these challenges are complex. In fact, well-versed people in business must also deal with them no matter how long they have been in entrepreneurial activities when it comes to starting a fully new business. Here are four most common initial obstacles that entrepreneurs face when trying to turn their passion into a business activity:
Though experienced entrepreneurs do have a few advantages over newcomers, they still lack sufficient resources to fund their new business. This is mainly because you will be starting from scratch. Without money, you can hardly purchase the domain of your business website. Finance serves as the fuel to ignite your idea. Hence, you have to use it most often to turn the idea into a giant, fiery business.
Fortunately, there are many ways by which you can arrange finances to launch your new start-up, including:
- Crowdfunding: There are various crowd-funding sites, like Kickstarter, Fundable, and Indiegogo, that can help you generate funds of hundreds and thousands of dollars.
- Family and friends: Your family and friends are always there to help and support your dreams. You can approach them to obtain some kind of loan that is often without any interest payments.
- Credit cards: Though helpful, a credit card provides a temporary solution between getting your business launched and obtaining other funds such as a bank loan.
- Bank financing: A bank loan is one of the most common ways people adapt to raise capital for their business.
- Venture capital: When you have a robust business plan and a powerful vision, many venture capitalists are willing to invest in your business.
- Business partner: You may have a potential idea but not enough reserves to put that into execution. You might know someone who believes in your idea, has a good relationship with you and has enough funds to start the new business. Then, partnering with that person may be a good idea.
- Second mortgage: Home equity lines of credit or a second mortgage should be your last resort when other options are not working out or aren’t enough to initiate the business.
Teambuilding is especially the toughest skill to nurture when you have never run or led a team before. Moreover, even though you have good management experience, selecting the right pool of team members for your new business is often stressful and difficult. It is not simply about filling certain roles; you also have to bear their costs, effectively communicate your business goals to them, and make the most out of them. Such considerations are significantly hard when you are rushing to fill the positions as early as possible.
Here are some ways to build a great team in a shorter span of time for your business start-up:
- Offer stock options: When you cannot meet their salary needs, offer them equity in your business. This will boost motivation and will give you competent teammates.
- Employ interns: When you can offer great work, mentorship, and guidance, hiring interns is a smart alternative to heavily paid team members.
- Hire students, part-time employees or contractors: When you cannot afford full-time workers, acquire contractors, part-time team members or students instead.
- Defer compensation: You have to be very careful with your offer letters’ wordings for hiring employees on deferred compensation. You also have to ensure that there is no breach of any laws.
- Inspire others to join you: When you lack funds, then at the very least, you should have a compelling vision with extraordinary goals that will inspire and motivate others to be part of your startup and support you.
3. Cut-throat Competition
The corporate world is quite terrible with fierce competition, which poses one of the biggest hurdles for the launching and survival of startup businesses. In fact, there is always some level of competition among businesses of same nature. And when you are a new online business, the competition gets tougher. However, when you have an inspiring vision, energetic team, unique service solutions, and outstanding customer service, you can remarkably beat your competitors.
Here are two practical ways to overcome business competition:
- Focus on your customer needs: Nothing can help a business grow if you are unable to sell your products or services to your customers. Focus on the needs of your clients and come out with a unique service solution that eases their life. Everyone avoids the hassle, so is your customer. Improve your products compared to what is already available in the market and make the most of the technology to sell more smartly, making the purchase hassle-free.
- Make it appear unique: People love tasting new things. When you launch a product with some unique features and details that distinguish them from other similar products, you are tempting your customers to buy from you.
4. Business registration
Business registration is quite time-consuming and a complex part of initiating a business. Some businesses have such peculiar nature that they cannot be launched without prior registration and legal approval is required such with medical facilities, bookkeeping, auditing consultancy, and educational institutes, regardless of how small their businesses are. In fact, it is more frightening for those entrepreneurs who have never been through any legal processes. To get rid of this complicated startup registration process issue and other legal requirements, it is wise to hire a personal legal consultant. A legal adviser will not only handle these matters themselves on your behalf but also help you launch your business seamlessly.
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