Being the boss is rewarding, but not without challenges. Though there will be peaks and valleys throughout your time as an entrepreneur, it is the beginning stages of starting a business that seems to cause the most obstacles.
The quest to establish a new brand and being successful in the competition is not an easy one. Everything from raising startup funds and managing cash flow to standing out from the competition and obtaining new customers, there’s a lot that comes up for first-time entrepreneurs.
Knowing how to quickly deal with the problem and keep business going is a must.
Raising Startup Capital
Most entrepreneurs aren’t sitting on cash that can be used to invest in a business. Requiring several hundred, if not thousands of dollars to get started, many hopeful business owners get stuck at the very beginning.
Solution: There are several avenues you can take to raise funds for your startup. Each of the options will greatly depend on the amount of effort you’re willing to put in, and how much of a risk you’re willing to take. For instance, crowdfunding is a new method for funding startups. A free account detailing your business goals and financial goals can warrant hundreds of people to donate meaning you don’t have to pay the cash back. Taking out a loan, although an option, will have higher risks in that you’ll be required to pay back the loan as well as interest and associated feeds.
Every entrepreneur could use a team of professionals to help them launch and manage their business. Though they may have the talent to complete many of the responsibilities required of them, most entrepreneurs realize the benefit of having staff.
Be that as it may, most entrepreneurs lack the capital to pay for in-house staff full-time. The cost of employer taxes, benefits, and operational costs like office space and utilities is often too much to cover in the beginning.
Solution: Though hiring full-time staff in-house may be more than you can afford in the beginning stages of your business, you can seek outside help for tasks like accounting, information technology, and back-end office assistance. Working with a location-specific agency like a New York PEO or professional employer organization would connect you to a network of remote professionals in your area that you can hire on a per-project, as-needed basis. A remote workforce saves money on overhead costs and also eliminates the need to pay those hefty employer taxes and benefit packages.
Businesses find it difficult to stay successful when they don’t have proper cash flow. This is especially true for business who bill their customers via invoice.
Though the work is completed, and/or the product has been sold, the transaction cannot be considered revenue until the customer has actually paid the invoice. Depending on the creditworthiness of your customer base, this could take weeks, months, or years, leaving you to foot the bill on expenses until then.
Solution: Learning proper invoice management methods is the first line of defense. Invoices should be sent out timely and clearly outline the cost of product or service, due date, and payment terms. Follow-ups should be made timely and various methods of payments should be accepted for convenience. A backup plan is also needed. As sometimes, no matter how thorough you are, you could have several customers that just aren’t paying timely. Invoice factoring, in this instance, would be ideal. You can receive a portion of the outstanding balance upfront from an invoice financing company and use it to cover expenses until the total balance is collected.
Be it trouble identifying or connecting with your target audience, issues with hiring the right staff, or trouble with accounting and tax compliance, there will always be some obstacle that you’ll have to overcome as an entrepreneur.
The key to dealing with each of these matters as they arise is to first remain confident in your brand and in your ability to succeed. The second is to come up with a plan of action to get through the challenge without much issue. The above-mentioned tools are a great place to start.