What is the Biggest Challenge Entrepreneurs Face Today?

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  • Erik G.Erik G. Atlanta, GA (USA)subscriber Posts: 4 Member
    I'd say the single greatest challenge that entrepreneurs face hasn't changed with time. It's SCALABILITY.

    A scalable company is one that can maintain or improve profit margins while sales volume increases. In other words, a business cannot afford to lose revenue traction in order to produce more goods or services unless it has a well thought out strategy to secure a second round of funding (or your first round if you're bootstrapping).

    Angel investors take a huge risk when they invest in a startup. Consequently, they generally seek a return of 10x or more on every investment. They also want to recoup their investment in a relatively short time period. To receive serious consideration from Angel Investors your ROI should be 30-40% minimum. Also, the payback and dividend period should be no more than five to seven years out.

    The challenge to scale is eons old. History is littered with inventors and patent holders who couldn't figure out the equations. Consequently, they're beaten by better and brighter businessmen.

    I'm a product of Jack Welch's GE and he used to say, "Get better or get beaten." So true.
  • Matt_ShieldsMatt_Shields Clevelandsubscriber Posts: 32 Bronze Level Member
    My answer: Turning Your Ideas Into Reality

    When markets get more competitive these days, the hunt for the 'next big thing' becomes more cutthroat, like the Game of Thrones series (minus the gore, the romance, and the dragons). I'm hosting casual meetups for local entrepreneurs from time to time, and one of the biggest fears I hear is how they will know if their idea will really work. You may think that many are into pitching ideas to potential VCs, but people still fear that someone will steal their ideas at the end of the day; and so, they would look for other ways to fund their dreams and having more control over their business, even if that route takes a longer time for them to launch.

    Speaking from experience, what I find most challenging in my niche is the language and culture barrier that you have to deal with when you're taking your idea to China (I've written about it here). The last thing you want when you're having a product designed in another country and get it ready for production is having the wrong specifications. It can really cost you a lot if you're producing it in bulk. So, the way I dealt with it is to have all the prototyping and testing done here in the US before having the final product design reproduced for mass consumption.
  • Andre BrownAndre Brown Charlotte,NCsubscriber Posts: 55 Bronze Level Member
    I think that the most important challenges are:

    1. Lack Of Courage: If you don't have the courage to start your own business you will never now if you could succeed.

    2. Trying To Go It All Alone. In order for a business to flourish you need outside help as well. Connecting with others that have more knowledge than you can help you learn more. They can also tell you about their hardships and the mistakes they made so you don't make them.

    3. Thinking It's Going To Be Easy: Starting a business is not easy. Once you take that leap of faith you better to be prepared to work yourself off. It takes time to get noticed when you're first starting out. You have to try many different things to see what works for you.

    4. Not Making Money Right Away: As an entrepreneur you can't expect to money as soon you start you business. You have to market yourself so people know who you are as well as coming up with a product that people like and want to buy.

    5. Reaching Your Target Audience: With this one you can't try to target everyone in your industry. There's too much noise and competition which will make it hard for you to be noticed. It's best to focus on a small group of people that have specific needs that you can cater to. Another good thing is to do your services for free. This will draw more people to you since there's no pressure on them. If you do a good job they will tell other people about you and once you get more experience you can charge people for your services. Once you build a good reputation people won't mind paying you.
  • Ryan O'BlenessRyan O'Bleness Birmingham, Mich. administrator Posts: 1,055 Site Admin
    edited October 2017
    All great points, @Andre Brown, @Matt Shields and @Erik G. 

    If there is one conclusion aspiring entrepreneurs can draw from this thread, it's that there are so many challenges when trying to start or grow your business. Some big, some small, some expected, some unexpected, some daily and some every once in a while. But perseverance and the ability to creatively solve problems will go a long way in this game. 

    Looking forward to the next round of answers. Keep them coming, community members! 
    Ryan O'Bleness
    Community Manager
    StartupNation, LLC
  • contentcouplecontentcouple subscriber Posts: 11 Bronze Level Member
    I think in many cases it's lack of long-term planning, especially in small businesses. Enterpreneurs try to advertise and sell immediately, but many of them don't even think to build a long lasting system. The system could be useful especially in difficult times, but, in my opinion, most businesses don't have it.
  • SPCSPC Greater New York Areasubscriber Posts: 7 Member
    @"Ryan O'Bleness - I would add one more - reducing risk by knowing your market. If you have your market dialed in, so many of these other items follow.
  • Mark AlleyMark Alley subscriber Posts: 1 Member
    I would say that the biggest issue facing new entrepreneur these days is lack of knowledge. It takes a lot of time and work to sift through all the garbage out there and ultimately you just have to jump in with two feet and start swimming.
  • saravanansaravanan subscriber Posts: 389 Silver Level Member

     Marketing

    Many startups fail in this stage because when it comes to the marketing of their brand/product they have to adopt best strategies within the limited budget.

    Try to implement SWOT and other marketing analysis on your startup to know which is the potential market and how you can utilize your best resources effectively and efficiently.

  • EllenDaresEllenDares subscriber Posts: 0 Member
    As per my knowledge, the biggest challenge faced by the entrepreneur are decision making and team building.
  • valikkavalikka subscriber Posts: 19 Bronze Level Member

    each area has its own problems
  • FrankLeeFrankLee subscriber Posts: 32 Bronze Level Member

    I would certainly say financing their enterprises is a big challenge for women. Many self-fund their business ventures in the early days from income from another job or use personal credit cards and overdrafts. There appears to be a reluctance to source business financing from lenders, for a number of different reasons - fear of failure, lack of belief, fear of being rejected, not understanding the requirements of business loans etc.

  • FrankLeeFrankLee subscriber Posts: 32 Bronze Level Member

    I have also some thoughts about the difficulties concerning the choice of partners, developers etc. Being flexible in the contemporary fast-changing market is the major requirement, and the case of the best software development company is not an exception

  • M FrancesM Frances subscriber Posts: 7 Member

    Hey Ryan in hot, humid Michigan! (Don't ask me how I know, but suffice it to say, I'm blessed to have AC!)

    You've posted a great question and I think visibility is a huge challenge! Back in the day when the Yellow Pages were king, advertising was automatic, even if a business didn't place an ad, because the business name was automatically published, along with phone number and address. Now, perhaps the only ways to find a business is through word-of-mouth, minimal advertising opportunities, Google or other specialized search engines, and new ones pop up every day. That may be why billboards are starting to make a comeback, did you know? That's apparently because if someone's driving, but stopped in traffic, they're pretty much guaranteed to see that big honkin' ad. 🙂 (Otherwise, I'm partial to community-supporting businesses being featured in memorable "good news" stories.)

  • atikaatika subscriber Posts: 12 Bronze Level Member

    in my opinion as always - this is competition

  • Jessie HookieJessie Hookie subscriber Posts: 148 Silver Level Member

    Top 10 challenges faced by entrepreneurs today:

    1. Cash flow management

    The challenge: Cash flow is essential to small business survival, yet many entrepreneurs struggle to pay the bills (let alone themselves) while they’re waiting for checks to arrive. Part of the problem stems from delayed invoicing, which is common in the entrepreneurial world. 

    The solution:  Proper budgeting and planning are critical to maintaining cash flow, but even these won’t always save you from stressing over bills. One way to improve cash flow is to require a down payment for your products and services. 

    2. Hiring employees

    The challenge: The hiring process can take several days of your time: reviewing resumes, sitting through interviews, sifting through so many unqualified candidates to find the diamonds in the rough.

    The solution:  You can save yourself a ton of time by pre-qualifying candidates through exclusive help wanted ads that are ultra-specific in what it takes to be hired at your firm, as well as what the day-to-day work entails. 

    3. Time management

    The challenge: Time management might be the biggest problem faced by entrepreneurs.

    The solution:

    • Create goal lists: You should have a list of lifetime goals, broken down into annual goals, broken down into monthly goals, and then broken down into weekly goals. Your weekly goals then will be broken down into specific tasks by day. In this manner, what is on your task list in any given day is all you need to do to stay on track with your lifetime goals
    • If any tasks do not mesh with your goals, eliminate them
    • If any tasks do not absolutely have to be completed by you, delegate them
    • Consistently ask yourself: “Is what I’m doing right now the absolute best use of my time?”

    4. Delegating tasks

    The challenge: You need to delegate or outsource tasks, but it seems every time you do something gets messed up and you have to redo it anyway.

    The solution:  Find good employees and good outsourced contract help, for starters. You might have to pay a little more for it, but the savings in time and the resulting earning potential more than make up for it.

    5. Choosing what to sell

    The challenge: You could make a mint if you just knew what products and services to sell. You’re just unsure how to pick a niche.

    The solution: Admit that you’re weak in identifying prosperous niches, and delegate the task to someone who is strong in this area. You don’t have to hire a huge, expensive marketing firm; rather, recruit a freelance researcher who has experience in whatever type of field you’re considering entering (retail e-commerce, service industry, publishing, etc.). Have them conduct market research and create a report with suggested niches, backed by potential profit margins and a complete SWOT analysis: Strengths, Weaknesses, Opportunities and Threats.

    6. Marketing strategy

    The challenge:  You don’t know the best way to market your products and services: print, online, mobile, advertising, etc. You want to maximize your return on investment with efficient, targeted marketing that gets results.

    The solution: Again, if you’re not adept at creating marketing plans and placing ads, it’s a good idea to outsource your marketing strategy to someone who is. At this point, all you need is a core marketing plan

    7. Capital

    The challenge: You want to start or grow your business, but you have little capital to do it with.

    The solution: There are many ways to earn funding, from traditional bank loans to family and friends.

    8. Strapped budget

    The challenge: Even though cash flow is fine, it seems you never have enough in your budget to market your company to its full potential.

    The solution: Every entrepreneur struggles with their budget. The key is to prioritize your marketing efforts with efficiency in mind — spend your money where it works — and reserve the rest for operating expenses and experimenting with other marketing methods.

    9. Business growth

    The challenge: We’re assuming you are growing, not that you can’t grow, and you’ve come to the point at which you can’t take on any more work in your current structure.

    The solution: Create new processes that focus on task delegation. The only way to break through is to delegate tasks to others to take yourself out of the production end, and segue into management and, finally, pure ownership.

    10. Self-doubt

    The challenge: An entrepreneur’s life is not enviable, at least in the beginning. It’s extremely easy to get discouraged when something goes wrong or when you’re not growing as fast as you’d like. Self-doubt creeps in, and you feel like giving up.

    The solution: Being able to overcome self-doubt is a necessary trait for entrepreneurs. Having a good support system will help: family and friends who know your goals and support your plight, as well as an advisory board of other entrepreneurs who can objectively opine as to the direction of your business.

     

     

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