“I don’t know the word ‘quit.’ Either I never did, or I have abolished it.”– Susan Butcher
Entrepreneurship is not an easy game. You can be successful only if you have the courage to handle its consequences. So here we are going to discuss what Challenges Entrepreneurs Face When Starting A Business.
Why you want to start
The first thing you should ask yourself is why do you want to start the business? Do you want to start it to earn money or to help someone? You can not earn money without helping someone your business should solve another person’s problem.
We will look at few examples
- Amazon helped to deliver books to people which made it easier for customers they solved the problem.
- Xiaomi started providing mid-range phones under ten to fifteen thousand and they captured the market very quickly. They solved customer problems when no one was doing it.
Cash Flow Management
Many people do not know how to manage their cash flow and it becomes a challenge for entrepreneurs while starting a business. You need to learn how you can manage cash flow. How much money do you need to save for reserves and emergency funds?
What is the tax slab for your business? How you will save tax legally? What tax regime you will opt for?
FACT- Do you know 80% of businesses fail because of a lack of cash flow management.
How much money do you need to survive and what is your spending rate? When people start their business they spend money countlessly without thinking about anything.
This is one of the biggest challenge entrepreneurs faces when starting a business. They do not know what to spend, Where to spend and how to spend?
Many people do not know how to market their products. It becomes very challenging for entrepreneurs while starting a business. Marketing is the basic skill these days if you want to start your own business. Every famous entrepreneur is a good marketer.
In today’s world marketing becomes more important than the product how you will make people aware of your product is quite important in the 21st century. Companies like Apple, Nike, Ford Motor, and Reliance spending
billions of dollars on marketing their products and services every year.
And other companies who do not spend a single penny on marketing even they offer good products and services. It shows how important it becomes for you and your business to understand marketing and spend money on it.
What to outsource and to whom
When new entrepreneurs start their business they try to become a one-man army and do everything on their own. It becomes very challenging for new entrepreneurs while starting their businesses. They do not know what to outsource and to whom you need to outsources?
You need to outsource work that is not very important for you and you need to focus on your core work which you can easily do without handling too many things.
You need to have a lot of patience because you can not become successful without having patience. If you want to start your business or are Some people are already working on it, you should remind yourself that your hard work will pay.
Many people start their business but can not sustain it. They think they will be successful in a day or month they dream of overnight success. Overnight success is not possible in a day or month it takes years and decades.
You need to become a good leader. Leadership becomes Challenge for entrepreneurs while starting a business. They lack leadership it is very hard for them to handle their team and employees. Many businesses fail because they lack leadership. Bad leadership also gives stress.
FACT- Do you know 95% of businesses fail because of a lack of Leadership qualities.
You need to have a vision of what you want to do with your business. You need to have a vision of how your business will be and what impact it will create.
- Steve Jobs had a vision with technology how technology will empower the world in the future.
- Elon Musk is also working on his vision of landing a rocket on mars by 2022.
You need to also have a vision of how things will work for you in the future. What is your short and long-term vision with your business?
I will divide this into 2 categories.
- There are people who just plan and plan continuously but do not take any action. I do understand planning is very important but it is not the only thing you need to do. You need to take action to start your business. Without taking action you can not become successful.
- In the second category, some people do not plan at all they just start things without understanding the nature of business what challenges they will face while starting a business. They do not make a business plan they do not consider the above factors like cash management, burn rate, marketing, patience, and leadership, etc.
We will look at few examples of what Challenges famous entrepreneurs faced when they started their businesses.
Serum Institute of India
Serum Institute of India was started in the year 1966 by Cyrus S. Poonawalla. They use to manufacture vaccination for horses because they used to own horse farms during that time.
After 2 years in the year 1968, they started to manufacture tetanus vaccination for developing countries like India and Africa where per capita income was low and countries can not afford vaccination then. This was a big shift in their business from horse vaccination to tetanus vaccination.
After that, they started expanding their biotechnology business and started producing various types of vaccination for different types of diseases like Polio vaccine and Diphtheria, Pertussis, Hib, BCG, r-Hepatitis B Measles, Mumps, and Rubella vaccines.
It is estimated that about 65% of the children in the world receive at least one vaccine manufactured by Serum Institute.
We all know this guy is one of the biggest risk-taker in history. But do you know his story? We all know Elon Musk started his company but his vision was to make low-cost and reusable rockets. But he became successful 4th time and he was nearly bankrupt and living in a rented house.
After he became successful, he got a project and funding from ISRO and NASA, funded by the government. After making Space X successful he started tesla and his vision was way ahead of time in 2003.
His vision for making a Self-driving car in 2003 was way ahead of his time but it was not easy for him in the year 2003 it took 8 years. To make a successful self-driving car under budget and in 2010 they started selling their cars in America and never looked back.
Now Tesla is the market player in the self-driving car market. Also, they are planning to launch their model 3 car in India in December. He is the best example for upcoming entrepreneurs whenever they face challenges while starting their businesses.
Flex-N-Gate Corporation was bought by Shahid Khan in 1980. They are an automotive parts supplier company. When Shahid started it was not easy for him to get clients. The first client Flex-N-Gate Corporation got was a General Motors Vehicle manufacturer but they ditched within a year.
After that Shahid struggled to get clients but after struggling for some time he started manufacturing parts for companies like ISUZU and Toyota.
Now Shahid Khan is a Pakistani-American businessman billionaire worth 790 crores USD according to Forbes.
Shahid Khan is one of the best examples of what challenges automobile Entrepreneurs face when starting a business.
In this blog, we have discussed what challenges entrepreneurs face while starting a business and how to overcome them. Also, we have discussed few examples like Amazon and Tesla, etc to help entrepreneurs to understand how they can solve a problem like them.
Risks and challenges of starting a business?
There are many risks and challenges entrepreneurs face when starting a business is lack of Cashflow.
Problems faced by entrepreneurs in India?
Challenges entrepreneurs face when starting a business is cultural and geographical restriction. Some of the businesses may work in Rajesthan but they will not work in Punjab.
Major challenges faced by social entrepreneurs?
The challenges social entrepreneurs face when starting a business is no one accepts and values them they do not get respect in society it takes a lot of time for them to get recognition in the society.
Biggest challenges facing businesses today?
The biggest challenge entrepreneurs facing right now is most of them do not opt for online mediums and now they are suffering to survive in the market.
How to manage cash flow in business?
This is a Challenging problem new entrepreneurs face when starting a business. Spend less on yourself, bootstrap your business, apply for government schemes where they do not ask for collateral and some of the schemes provide zero percent interest on a loan or very little and work hard.