15 Challenges Faced By New Entrepreneurs (and How to Handle Them)

As entrepreneurs, we face challenges every single day. While we wish that running a company was a smooth sail, it tends to be anything but that!

 

The thing is, we chose to be entrepreneurs because we have a passion to create something spectacular. At the end of the day, our job is difficult, but we wouldn’t trade it for the world.

 

Here is a list of fifteen challenges that entrepreneurs face along their journeys. Acknowledging the problem is the first step toward preventing it from happening, but the second step is figuring out how to solve it. Below, I will also give you the techniques to steer clear and make sure that you never face these problems again.

 

  1. The process of hiring employees

 

Choosing the right employees to represent your brand/company is no easy task. It tends to be time consuming to sort through applications, conduct interviews, and train new employees once they are hired. You also have to set yourself apart as a company; why should this person want to work for your company versus one of your competitors?

 

How to handle it:

 

As I stated, this is a potential employee who will possibly spend a lot of time with your company if hired. Before running through interviews, take the time to think about the characteristics you would want a person working for your company to have. When interviewing, determine whether or not you think that they fit the profile.

 

Also conduct multiple interviews. After the initial screening, invite interviewees back a second time. This time, have them conduct a task similar to that of their potential job function, and perhaps have them interview with another member from your team. This way you can get a second opinion from somebody that you trust.

 

It is also logical to do a personality test on your potential employers such as the Myers Briggs personality test. I completed one when I first started working for Appfluence, so that my new employer could get an idea of how I work with people, my personality, and see if I was a good fit.

 

Lastly, it is always a good idea to ask for credible references and follow through with them. While many companies ask for references, not all follow up with them. Make sure not to ignore them. The references might have valuable information about this potential employee.

 

  1. Keeping up with innovation

 

As stated by the CEO of Amazon.com Jeff Bezos, “If your customer base is aging with you, then eventually you are going to become obsolete or irrelevant. You need to constantly be figuring out who are your new customers and what you are doing to stay forever young.”

 

How to handle it:

 

No entrepreneur wants to hear that their business model or product is a thing of the past. For this reason, you must continue to renovate your product, business model, etc.

 

Blockbuster is a perfect example. They failed to create a new business model that gave people what they were looking for in this day and age. That is why Netflix took over, and Blockbuster is now a thing of the past.

 

So, while you might be perfectly content with how things are going now, your target market may be changing under your nose. In the long run, they are the ones that you need to cater to, so stay attent to make sure you give them what they are looking for.

 

  1. Managing your budget

 

This is probably one of the most stressful aspects of running a company, especially when it comes to startups and small businesses. If you encounter this issue, how do you use the resources you have to their full potential?

 

How to handle it:

 

Closely inspect your budget and determine the areas where you have executed your budget successfully and the areas where you have spent way too much and had little return. One easy way to do this is to divide the each cost in your budget into a matrix with the four following categories.

 

 

  • High Cost, High Reward
  • High Cost, Low Reward
  • Low Cost, High Reward
  • Low Cost, Low Reward

 

When you closely inspect your budget, you will likely find a number of high cost, low return spending areas where you can cut down or find out areas where you can better spend your money.

 

  1. You fail to engage with your customers

 

No matter what type of business you are running, your number one goal should be to keep your customers happy. Your success is reliant on how your customers feel, so make sure that they are feeling GREAT!

 

How to handle it:

 

Set apart time each day to ensure spectacular customer service. If you have a small business and a large to-do list, this might seem tough, but it is necessary that you devote time to your customers to help them and get feedback.

 

If you do happen to have a team, delegate this responsibility to one of your employees to tackle.

 

You should also keep in mind that not all feedback is good feedback. However, if you really want to improve, you need to take your customers feedback very seriously and keep an open mind; never discredit their requests or advice. Rather, evaluate it seriously before deciding whether, and how, to act on it.

 

  1. Sales are down

 

This is bound to happen at some point no matter what industry you are in.The harsh reality is that there are inevitable bumps when running a business, the economy slumps, and inflation occurs.

 

How to handle it:

 

The last thing you should do is get into a funk. It is absolutely necessary to stay positive and do not allow this to bring you down. It should, however, motivate you even more.

 

Unfortunately, there is not a one-size-fits-all solution. You must factor in the type of business you are running, the timing, and the specific issue.

 

So, take this time to figure out why your sales are low.

 

  • Is it because you are not catering to your customers needs?
  • Are you not using the proper marketing techniques to best attract your target audience?
  • Is it possible that your product/business model needs renovation because what was once effective no longer seems to do the trick?

 

Whatever it is, you need to find the ultimate cause(s) and create a concrete plan to increase your sales and come up with a solution.

 

  1. Employee motivation is low

 

Sometimes your employees are not as eager as you would like them to be, but this is your business, your baby; so obviously you want it to thrive. Your employees on the other hand, well, it simply may not mean as much to them as it does to you. How can you get your business to be their baby, too?

 

How to handle it:

 

As noted in this article on how to motivate employees,

 

“As a manager, workers see you as the person on the top of the food chain who reaps rewards from their work. At times, it can be frustrating for workers to watch their gains fall into the hands of another. For this reason, you must make it clear that your gains are their gains, too.”

 

So, give your employees incentives. It could be as small as a certificate for a massage or a nice dinner on you. Your incentives could also be large. Hard work could lead up to a raise, commision on top of salary, or a management position in the future.

 

Also, let employees know that you appreciate them. Tell them that you like their work and that you think that they are doing a fabulous job. If you are a pleasant leader, they are even more likely to deliver to your expectations.

 

Sometimes you just need to give the people who focus so much energy into your company some motives and reinforcement.

 

  1. Managing your time

 

Have you ever wished that the day had more than 24 hours? I know I have. We have so many different priorities, but not enough time to complete them. Every entrepreneur needs a solid time management plan.

 

How to handle it:

 

I am definitely a fan of the Eisenhower Method of Time Management which allows you to organize your tasks based on their criticalness and urgency. This allows you to determine what needs to be done first and foremost and what can wait.

 

Divide all of your tasks and projects into four categories:

 

  1. Critical and Urgent
  2. Critical but Not Urgent
  3. Not Critical but Urgent
  4. Not Critical and Not Urgent

 

Most of your effort should be focused in the top two quadrants. This is where high-impact work happens. If you’re working on tasks that aren’t critical or urgent, you may be focusing on the wrong things.

 

Here is a picture of the Eisenhower Matrix in more detail:

 

The Eisenhower Matrix

  1. Task delegation

 

As an entrepreneur, it is easy to feel like you have to do it all, but realistically, you can’t. It’s essential to delegate routine processes to your employees so you can focus on running your company from a higher level.

 

How to handle it:

 

There are two difficulties when it comes to delegating tasks:

 

  • You feel that you are the only person who can do the task best
  • You simply do not know which tasks are meant to be delegated

 

Take another look up at the Eisenhower Method. You should delegate the tasks under Quadrant 3, Not Critical, but Urgent. These include things like:

 

  • Following up with customers
  • Paperwork
  • Other tasks that don’t require your specific expertise

 

Trust me, you will feel a relief taken off your shoulders when you realize how much time you can save by effectively delegating.

 

  1. Keeping up with rapidly changing modern times

 

No matter your niche, your company should be present on social media.

 

How to handle it:

 

If you are already social media master, you can skip over this solution, but if you are not so social media savvy, I recommend that you read on.

 

According to HubSpot, “83% of marketers indicate that social media is important for their business.” This is where they communicate with their customers, and good companies actively engage with customer inquiries through their social media accounts because face it, so many people are on social media these days.

 

Social media allows you to:

  • Grow your customer base. I can’t tell you how many times I have discovered a new product, company, and even my favorite ice cream place through social media promotion, shares, etc.
  • Build your brand, if executed correctly. Potential customers view an active social media profile as a sign of trustworthiness..
  • Increase traffic to your website when people click on the links provided on your social media accounts.

 

Consider taking this quiz created by Kim Garst from Boom Social. It will match you with the best social media platform based on questions you answer. Try to incorporate using this platform into your business model and watch your following and sales grow.

 

If you have enough resources, it might be a good idea to hire a social media professional to help get you started on your social media journey.

 

  1. You are in a constant state of fatigue

 

According to the Centers for Disease Control (CDC), adults need at least 7-8 hours of sleep each night. Are you getting that much?

 

Since you have so much on your plate, you never seem to get any sleep because your mind is always running. Many experienced entrepreneurs might argue that they don’t need sleep, but this might be a little unsettling to the entrepreneur that is just starting out.

 

How to handle it:

 

Throw away that 5-Hour Energy. Seriously. If your body is begging for sleep, you need to listen to it rather than shutting down that signal.

 

You need to have a set amount of time each day to just forget about anything job related. Put away your phone. Ignore any email notifications (and snooze your emails using Inbox Pause), and just do something you enjoy. If yoga relaxes you, join a yoga studio that offers a class during your time off. If running helps you release stress, invest in a treadmill. If you want to take a hot bath, take a hot bath.

 

Our mind is constantly running and never seems to think about anything other than our business, but the bottom line is that you will accomplish more when you are in a more focused state-of-mind. To be in that mindset , you need to relax, take time for yourself, and get good rest.

 

  1. You blend in with your competitors

 

You need to stand out and find what you need to do to give your company an edge.

 

How to handle it:

 

Sometimes it is hard to distinguish yourself from competitors because your product/business is relatively similar.

 

Let’s take a look at Chipotle and Qdoba for example. While the two companies are very similar (build your own burrito style fast-food), they have components that allow them to stand out. From there, customers can determine which one is worth their bucks.

 

  • Chipotle does not have any processed food in its restaurants which allows them to stand out. They cater to the people who want a healthier alternative to fast food.
  • At Qdoba, guacamole comes with your meal and they have queso. For some people, this can be a make-or-break-it factor.


Another example, gas stations. You are standing in front of three gas stations clustered together, which one do you go to? For me, there are two factors involved in this decision:

 

  1. Do I have a rewards card with this company?
  2. Which one is the least expensive?

 

For that reason, each gas station gains its competitive edge using that criteria in order to receive the most business, thus attracting the most customers.

 

So, develop your niche. Make it clear what makes your product/company the best and why customers should choose your product over your competition. Do not take this lightly.

 

  1. People do not know who you are… yet

 

Perhaps you need to get yourself out there. Advertise.

 

How to handle it:

 

If you have the resources, hire somebody who is specialized in marketing so that you can get your name out there. If not, then you just need to do some research yourself.

 

Consider what type of advertising works best for your business (and your budget).

 

  • Would advertising on a billboard be to your advantage?
  • What about a commercial?
  • What about using a direct mail service like a magazine or an envelope of coupons?

 

For example, the company Valpak allows you to choose what areas that you would like to target, they create a coupon for you, and then they put it into the Valpak Envelope and send it to the houses in the area that you chose.

 

Whatever you do, do not solely rely on word-of-mouth to gain customers. You need to get yourself out there

 

  1. You are afraid to ask for help

 

This could be similar to the fear of task delegation. Admitting you can’t do it all is difficult for entrepreneurs, due to our independent nature.

 

How to handle it:

 

First things first, understand that asking for help does not imply that you are weak. If anything, it signifies strength. It’s not easy to acknowledge that you are not specialized in whatever area that you need help in and take the initiative to find help.

 

When you’re struggling, search through your network for someone who may have expertise in the area that you need it. Reach out through a quick email message and ask to set up a quick phone call. If you don’t ask, the answer will always be no.

 

  1. Not being prepared for growth

 

As an entrepreneur, you put your heart and soul into growing your business. When it starts to grow though, you might realize that you do not have the resources to grow at the moment which can hold you  back tremendously.

 

How to handle it:

 

Put together a plan. This plan should list different marks of progress (for example: 1,000 active customers, 2,000 active customers, 10,000 active customers or $10,000 in revenue, $20,000 in revenue, $50,000 in revenue).

 

For each stepping stone, budget the resources you will need when you get there as well as how you will acquire those resources. Be honest with yourself. Once you hit 10,000 active customers, you will probably not be able to keep your team of five, right? Make sure you plan logically and accordingly.

 

While small, develop processes that are scalable. This way, when the time comes to scale up, you’ll be ready.

 

This will prevent you from begging for your appearance on Shark Tank when you do not have enough resources as soon as your company starts to take off.

 

  1. Not being educated enough in your niche

 

It is easy to make the mistake of jumping into business without the proper knowledge of the particular field that you are going into.

 

How to handle it:

 

Read every possible resource that pertains to your business. Study, learn, and do your homework before you begin.

 

One of the biggest mistakes of a starting entrepreneur is being in the mindset that you will figure out everything as it goes. You need to be proactive and aware of the common problems that occur within your industry and know how to react and know the correct steps to fix problems as they arise.
As you can see, sometimes avoiding these challenges can be inevitable; simply put, being an entrepreneur is chaotic! However, I am a firm believer in prevention or tackling a problem immediately to ensure that it only leaves minimal effects in the long run. Use these techniques to reduce the bumps on the road to success, and you will be running the business that you have seen in your dreams in no time.

 

About the Author:

Danielle Levine works on Marketing for Appfluence. Appfluence is the creator of Priority Matrix, a collaboration tool that allows teams to work together more efficiently. When Danielle isn’t reading up on the latest about productivity, she’s writing about it on the Appfluence, Productivity 101.

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