Navigating Modern Entrepreneurial Challenges
Do you wish to be your own boss? If the answer is yes then there is a high chance of you considering entrepreneurship as the career of your dreams. However, it is important for you to know beforehand that being your own boss is a tough job. It is one thing to complete the work that you have been delegated and another to have the responsibility of ensuring that the work is completed in the best possible manner.
As you would expect, there are countless challenges that individuals face when they choose to embark on their entrepreneurial journeys. However, the fact remains that a majority of these problems can be catered to through adequate effort and hard work. Still, it would be great to have a cheat sheet at hand. Having said that, here is how entrepreneurs can go about solving their most common problems:
Management of Cash Flows
When you speak of the financial statements, the fact of the matter is that every statement has got something to add. For instance, the balance sheet indicates the financial standing of a business at a point in time. The income statement, on the other hand, gives an account of a business’ financial performance over the course of an entire year.
However, when you speak of a small business, none of the financial statements are as important as the statement of cash flows. Why? Well, it is because cash flow management is essential for a small business to thrive.
Small businesses can accomplish literally nothing with cash that is not liquid. It is no use having a large figure for accounts receivable when you do not even have enough cash in hand to pay the bills. Having to wait for checks to arrive before they can spend is one of the common problems of entrepreneurs.
When it comes to finding solution to problems faced by entrepreneurs in this regard, the call of the day is budgeting. It is essential for an entrepreneur to budget and plan in the best possible manner so that you can foresee every expense and be prepared in the best possible manner for dealing with them. However, the fact remains that it is impossible for you to escape EVERY problem related to cash flow management with the best budgeting strategy even.
Bearing this in mind, a strategy that businesses can pursue is that of receiving down payment for their products and services. The down payment should be sufficient enough to cover all the associated costs, meaning that you will not have to bear with the problem of not having enough money for dealing with rudimentary expenses—such as the payment of salaries—in the meantime.
Requiring faster invoice payments is another strategy through which such a problem might be eradicated. Gone are the days when it was okay for small businesses to offer credit terms as lenient as 30 days. In the modern world, the way to go for entrepreneurs is to not accept credit terms that exceed the period of 15 days.
On top of that, when you consider the progress of science and technology, you have got to say that it would not asking for too much from the customer in case a business requests immediate payment.
Are you of the perception that it is only the candidates who dread job interviews? If the answer is yes then you are clearly mistaken. This is so because entrepreneurs dread these interviews even more. The hiring of employees is one of the biggest challenges for new entrepreneurs.
When you speak of the challenges of entrepreneurship in developing countries, in particular, it is nothing short of a fact that the problem becomes even worse, considering how it is extremely tough to find quality prospects.
The biggest loss that entrepreneurs incur during the entire hiring process is that of time. The hiring process can take several days, meaning that the entrepreneur will be caught up in conducting job interviews rather than spending time on what truly matters to the wellbeing of their business.
On top of that, even if an entrepreneur does manage to stumble upon a diamond in the rough, it is incredibly tough for them to retain them, considering their demands for attractive packages.
When it comes to solutions to problem facing entrepreneurs, in this regard, you have got to say that the most important task at hand is for the entrepreneur to save as much time as possible during the entire process. Bearing that in mind, it is imperative for the entrepreneur to come with such ads that are incredibly precise and straightforward. Vague ads of “help wanted” will not quite cut it considering how they will attract a large variety of talent that might not be relevant for the job in question.
It is recommended for entrepreneurs to make all the necessities and requirements clear in the advertisement, all for the purpose of ensuring that only the relevant talent shows up for the interviews. On top of that, when you are interviewing a potential employee, it is imperative for you to ask them exactly what they are looking for.
Honesty is of utmost importance here, considering how you, as an entrepreneur, would not want to be going through the entire procedure owing to a new employee jumping ships after a few months into the job. If you believe that you and your organization will not be able to live up to the expectations that the potential employee has, it would be in the best interest for both parties if you move on to the next candidate, regardless of how capable they might be.
Remember: clarity is important!
When you speak of entrepreneurs, the fact that they have got to wear multiple hats at once should come as a no brainer. It is not that entrepreneurs like taking care of a majority of the business related tasks themselves, it is just that they have got to considering how affording wages is one of the greatest challenges for new entrepreneurs.
Bearing this in mind, new entrepreneurs are always in a race against time. They could accomplish everything on their own, on the backs of their determination and hard work, if they had infinite amount of time but the fact of the matter is that things do not work like that in the real. This means that successful entrepreneurs are masters of time management.
You must be aware of the cliché ‘money does not grow on trees’, right? Well, the fact of the matter is that time does not grow on trees either. What this means is that the simplest solution to problems facing entrepreneurs, in this regard, is for them to be extremely smart about how they spend their time.
For instance, it is imperative for them to create a ‘goals list’ everyday, which they might be able to consult on a daily basis to stay on track. The said list should not only contain annual goals but daily goals as well, so that it might be able to not only give an account of the long term goals but those relating to short term as well.
It is essential for an entrepreneur to make the most of the time that is at their disposal, right? This is the reason why they need to spend their time taking care of only such tasks that contribute directly to the goals that they have already set for themselves and their organizations.
Anything that is extra or does not mesh with the ‘greater goals’ is a task that is not as important and can be delegated to somebody with a little more time at their disposal. Similarly, if there is something that does not have to necessarily be taken care of by you, it should be delegated to somebody else.
Remember: the biggest challenge for new entrepreneurs is to understand what they should be doing and what they should be avoiding. They should only be indulging themselves in such business tasks that absolutely require their presence!
Regardless of whether you are a new businessman or an older one, the fact of the matter is that everybody wishes for their business to expand. When you speak of the requirements for expansion however, the need of capital cannot be stressed upon enough. It does not matter if you need to get a new office or star off a new line of products; the fact of the matter is that capital will play a pivotal role in each and every aspect.
It is common knowledge that capital is not something that small businesses, in particular, have got an abundance of. This ultimately means that it is a challenge for new entrepreneurs to come up with strategies and methods for capital generation. Regardless of how you choose to look at it, lack of capital is one of the most common problems faced by entrepreneurs, especially when it comes to expansion.
There are a number of routes for funding that are available for entrepreneurs to make use of. For instance, entrepreneurs can choose to take loans from traditional banks. On top of that, the option of taking loans from their relatives is open for the as well. There are Kickstarter campaigns as well, but they are not as widely available for answering the challenges of entrepreneurship in developing countries.
All these routes are potential solutions to the problems facing entrepreneurs no doubt, but the fact remains that it is preferable for the growth of the business to be fueled by the self. The best manner to accumulate capital is to establish your business as the first choice for relevant customers, over the course of time.
This can be achieved by starting small and targeting a core group of customers. By serving that group of customers in the best possible manner, you will create the probability of word-of-mouth doing the job for you. This will allow your business to grow slowly and steadily, until the time you are in a position strong enough to consider expansion.
The biggest advantage that comes with adopting such a strategy lies in how the growth will be earned by the business, on its own, and not supported by anybody else. In other words: the business will not need to take on significant loans and liabilities for supporting its growth.
When it comes to a business’s budget, it is a fact that cash flows are not all that matter. What this means is that budget constraints are genuine challenges faced by new entrepreneurs. The cash flows of your business might be fine but there is a high chance of you still not having the money needed for taking your business to the next level. Budget constraints are common problems of entrepreneurs, especially when it comes to fulfilling their businesses’ potential.
The solution of problems facing entrepreneurs in the matters of budget constraints requires the entrepreneurs to prioritize. For instance, entrepreneurs should refrain from such marketing strategies that are merely extravagant and do more harm than good. Everything should be done while keeping the principle of efficiency in mind.
The golden rule requires entrepreneurs to spend their money on campaigns that have got a high probability of working and SAVING the rest for operating expenditures. This ensures that the problem of budget constraints does not arise as often.
On top of that, it is often a good idea for entrepreneurs to keep their eyes open to where the money is being spent. There is a high probability of the fact that your business has got areas that you can skim through to free up more funds.
When you take it all into perspective, you have got to say that are several challenges that small entrepreneurs, in particular, have got to contend with. Some of these challenges can be solved simply while some require a lot more effort.
Regardless of what the case might be, the fact remains that an entrepreneur will be best served by having true knowledge and understanding of their business!