Starting a business is an important step for many entrepreneurs, but most don’t realize that maintaining optimal parameters is actually the biggest challenge. After incorporation, many challenges arise that can disrupt the smooth running of operations.
Becoming an entrepreneur is a dream many people aspire to, but there are many things you need to consider in order to avoid or mitigate these obstacles.
In the following lines, find out what are the most important challenges for entrepreneurs after founding a company and which solutions are recommended in this regard.
1. Lack of support
If you’ve gotten past the start-up phase, you probably want things to run smoothly on their own. However, both companies and entrepreneurs need support. On the one hand, companies need financial, human and technical support. On the other hand, a business owner (especially if he is inexperienced) needs a mentor or advisor to guide him in the steps to achieve the company’s goals and mission.
In the absence of support, entrepreneurs may be discouraged by the high volume of activity or difficulties associated with maintaining business stability.
Solution: It is recommended to contact mentors or other entrepreneurs who have experienced similar situations. They will guide you to find ways to overcome these difficulties. The advice and information they provide will give you the inspiration you need to continue the company’s mission.
2. Money management
One of the reasons why companies fail in the first few years of their existence is the lack of clear financial resource management. Business owners don’t usually keep company accounts separate from personal accounts, which is why they tend to use the company’s financial resources for personal matters.
Initial expenditure on redundant activities only consumes the amount that can be invested or used to cover ongoing costs (purchases of raw materials, wages, etc.).
Money management becomes even more important when running a business involves expenses and selling products and providing services that ultimately generate revenue. In some cases, however, receivables were not collected on time, yet the charges kept piling up.
In the absence of a reserve fund or other backup plan, entrepreneurs are forced to turn to external sources of financing to cover costs and ensure the continued existence of the business.
Solution: It is important to clearly record cash flow in your business. If you are unable to collect invoices sent to clients on time, you can contact Factoring. Not only can you benefit from instant cash, but you can also pay suppliers, employees, and other businesses. This ensures that active objects remain profitable.
3. Lack of a clear plan and strategy
Even if you have an idea of what you want to achieve, chances are you’ll reach a point where you can’t align your business goals with that idea, or the actions you take won’t lead to the goal being achieved. Additionally, your business may be at risk or encounter problems you never thought possible.
Solution: You need to deal with these issues rationally but as quickly as possible while remaining focused on continuing the activity. Considering market research, review business plans, strategies and tactics. This allows you to determine whether a change in approach can achieve business goals.
4. Gain customer trust
Attracting customers and gaining their trust is a daunting task that companies rely on to build a strong customer base. These tasks ensure business continuity after launch. A portfolio full of satisfied customers will help the company grow. At the same time, it will support the building of brand loyalty, aiming to lead the company towards performance.
In a world where most companies are struggling to achieve this, consumers are skeptical and won’t approach your brand unless you take the proper steps.
Solution: To attract customers and gain their trust, you should implement a customer-centric philosophy. It is necessary to take the consumer’s situation into account when formulating strategies and decisions.
5. Focus on customer loyalty
After building a consistent customer base to ensure business profitability, retaining loyal customers is crucial. Mostly, entrepreneurs think that success depends only on attracting new customers. However, repeat purchases by loyal customers solidify sales and implicitly create notoriety in the marketplace. Acquiring new customers is usually more expensive than retaining existing ones.
Solution: To benefit from repeat purchases, companies can offer special offers (discounts, personalized offers, gifts). You can also organize contests and events to increase customer loyalty. Focus on rewarding true loyalty rather than customers who make a series of purchases or spend a certain amount.
6. Difficulty in financing
Access to financing is critical in the life cycle of a business. However, this is hampered by a number of factors, such as the age and size of the company. It is difficult for startups to obtain financing because the lack of information and assets that can be used as collateral creates risks for banks and financial institutions.
As a result, they are reluctant to lend to startups as easily as large corporations. In addition, high interest rates and excessive bureaucracy limit the interest of new companies in acquiring such resources.
Solution: Companies can turn to short-term financing options when traditional financing is not a cost-effective option. They are based on the capitalization of uncollected receivables. One of these alternatives is factoring, which is about fast access to liquidity, 100% transparent costs and without excessive bureaucracy.
7. Threats to data security
Rising cases of data theft and security breaches require the use of digital solutions to ensure cybersecurity.
Solution: It is imperative to securely implement data protection applications for businesses and customers. Regular backups and investing in secure servers and payment processors are recommended.