Running a business is hard and running a successful business is even harder. It can, however, be simplified and made easier if you invest sufficient time in research and planning before you move towards execution. A lot of entrepreneurs make the mistake of taking a blind start without a proper cost, market and audience analysis because they are looking for a quick escape from their 9-5 jobs. What they don’t realise is that owning a business won’t set them free or offer flexibility because a lot of things have to be considered including wages, taxes and more. Yes, a business is a 24/7 job that will keep them on their toes.
The introduction to an even more hectic lifestyle tends to get overwhelming for a good number of entrepreneurs, leading to businesses closing down in early stages. In order to analyse how running a business can be made less challenging, it is important to track down the few reasons why running a business appears so difficult to manage in the first place.
- Lack of Research
There is a stark difference between a great idea and a great start-up. A lot of people who enter the business world are not aware of this. This is because they do not do their proper research and analysis before assuming that their idea is going to take the market by storm. Some early misconceptions amongst newbies are that their business idea is fool proof, that they have thought out a solution to every possible problem that may come their way, that they have enough finances set aside to kick-start a business and that no one can do what they do better than them. These misconceptions are a product of lack of research and planning and lead to 20% of the businesses closing down in the very first year and fifty per cent within the first five years.
Research teaches a man to admit he is wrong and to be proud of the fact that he does so, rather than try with all his energy to defend an unsound plan because he is afraid that admission of error is a confession of weakness when rather it is a sign of strength. – F.H.E. Stocher
Analysis of the following basic things can set your business off to a smooth start.
- Are you prepared for a lifestyle change? The shift from working and an employee to starting an entrepreneurial venture is a shift of lifestyle. The responsibility of owning and running a business might sound very exciting and empowering but it is also a huge responsibility. You can’t just call in sick on bad days. And most importantly, it is not a quick way to become rich. It’s a small, painful but extremely rewarding process. So it is very important that you are aware and prepared to make this lifestyle change before jumping into the business world.
- Is there a demand for your product in the market? Before introducing a product or service, it is vital to analyse if there is a demand for your product in the market. Yes, you might believe that your product/service is going to sell like hot cakes, but your belief isn’t enough. Numerous businesses face challenges in terms of audience irrelevance and technical incompatibility when they launch without studying the market. Hence, a product, market and audience analysis can save you from business failure.
“People are the most important thing. Business model and product will follow if you have the right people.” -Adam Neumann, Co-founder of WeWork
On the other hand, when a market is too saturated and a lot of other companies offer the same solution that you do, success can seem slow paced or even non-existent unless you have a differentiation point. Your product/service must offer a unique selling point that will make your target audience prefer your product over other similar solutions.
- Can you work for your business consistently? As an entrepreneur, you must understand that the progress and growth of your business is dependent on you. You will ultimately responsible for the positive or negative development of your business. A lot of businesses close down not because they run out of money or time but because their owners give up when faced with challenges. Focus on building personal staying power through consistency, maximise your skills and understanding of business, and use this knowledge to bring improvements to the areas that lack success.
“Success isn’t always about greatness. It’s about consistency. Consistent hard work leads to success. Greatness will come.” – Dwayne Johnson
- Poor Time Management
Whether you are running a micro business or a well-recognised enterprise, being the owner of your business, you are bound to jump between various day to day business activities. Moving from pillar to post can be distracting and result in wastage of your valuable time. This is one of the most common challenges that entrepreneurs face. They work all day long but still, there is always something that goes unaccomplished. The whole process can be overwhelming and tiring.
“The time commitment in running a business and running it well is enormous. I own a micro-business, I have to do everything~ I design, create, photograph, and ship my products. I also have to promote, market and advertise them. I’m doing 5 different jobs in one. Time management skills are a must when owning your own business.” – Goose Niziolek, GoosieGirlBoutique.com
Don’t worry if time management is challenging for you. With numerous business productivity solutions available, you can learn to manage your time by using the following methods;
- To Do List Writing down all the tasks that need to be accomplished in a day and then prioritising these can help you to use your time efficiently and get organised.
- Time Tracking Tools There are numerous apps and soft wares available in the market, such as toggle and harvest, that can help you to keep track of your time. You can note down the amount of time you spend on each business activity and then take suitable measures to use yours more effectively in the future.
You don’t only need time tracking tools to track time spent on client’s work but also for tracking time spent on internal business activities. For Example; That 15-minute email catch-up in the morning is actually taking 30 minutes? At 5 days a week, 50 weeks a year, you’re spending an extra 62.5 hours just on email. Apply that to everything else you do, and you’ve got a sizeable time hog. This right here is a great reason to invest in time management tools.
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- Financial constraints
One common reason for businesses closing down in the early years is financial constraints. This happens despite making financial plans in the beginning. Why? Well, most entrepreneurs prepare overly positive financial plans. Often, the urgency to peruse a business idea leads to falsely accommodating financial plan, which instead of helping you set your financial goals tend to overshadow your business’s realistic financial needs.
Most of the financial plans that have not been checked by a financial expert, usually overestimate sales and underestimate business costs. If you want to convert your brilliant idea to get a shape of a flourishing business, it is important that you make a sound financial plan- including the financial estimate of unexpected costs, business losses and a realistic number of sales- and then get it reviewed by a financial expert.
“Take whatever amount of resources you think you need to start a business: time, money, etc. and double it. Triple it because that’s the reality of business. Even with a well-thought-out business plan, always expect the unexpected. When I started designing the first collection for Nantucket Kids, I thought, I need to set aside the time and funds for the summer collection and then for the fall collection. Not true. That’s not how the fashion industry works. You need to prepare at least a year ahead because retailers are placing their wholesale orders up to a year in advance for their inventory for the following year. This was something I hadn’t given consideration to because when I first launched the business, I hadn’t planned on taking wholesale orders. Now that Nantucket Kids is available in stores, the amount of planning, time and funds needed is trifold.” – Andrea Romito – Nantucket Kids
Learning financial handling basics before allocating budget can prove to be a saviour for your business. Don’t worry; you wouldn’t necessarily have to crunch numbers yourself. There are a number of ways you can handle your business finances effectively regardless of the size of your business;
- Make a sound financial plan
- Set budget limits for business activities
- Use an app/ software to keep track of your income and spending
- Hire Northants Accounting
- Keep personal and business finances separate
- Have a financial backup such as a part time job
- Getting the right team
Getting the right people on the bus. You can have a great service business, but if you don’t have the right support staff in place, you will never realize your potential. – Dr Philip J. Miller, RhinoPlasty NY
It is difficult to do manage all business activities alone. While most entrepreneurs start their business journey alone, once a business starts taking shape they need to employ people. As a business owner, it’s your responsibility and requirement to assemble, motivate, and manage a team for business areas such as development, sales, customer relations, financial handling etc. So, it’s important to assess the following points before hiring someone;
- Personality Test – Patience to work with a struggling startup
- Skillset – Someone who adds to your own skillset/ knowledge base
- Communication Skills –Public Relations is an integral part of small businesses t is therefore important to hire someone who’d be able to manage customer/client relations with a personalised touch.
Employees are the lifeblood of every company. Think not? Without a great staff, nothing works well. Having the right people, with the right attitudes and a willingness to be trained, is the primary job of every CEO. Do that well and the rest is easier. Making a motivated qualified employee work alongside of a slacker is the worse sin a CEO can commit. Treat and pay your staff very well and they will take you to heights you never dreamed of. – Richard Hayman- Hayman Consulting Group
- False expectations
You can do everything right in business and something is still bound to go wrong. The sooner you learn it, the more prepared you can be for possible setbacks and hurdles.
You’ve made a plan, you’re executing your strategy, and you’re living the dream. Until that is, someone or something moves the goal posts and you’re faced with the unexpected. How? Here are some examples;
- A big client decides to discontinue your services due to financial limitations.
- A competitor brand launches the same product/ service with better pricing and features
- Your sole customer relations employee resigns without enough time for you to employ someone well suited for the job
- More clients- this might seem like a positive thing but not if you don’t have enough resources in your team to manage the workload.
- Your manufacturer increases the production cost
Even if you are prepared for all possible scenarios, you need to get used to the fact that you won’t be able to plan for everything in advance and things will come your way which you’ll have to deal with there and then. As a business owner, you may find this element hard to deal with, but it’s an essential fact and something you won’t be able to avoid.
“For me, the hardest thing about running a business is managing expectations. In our industry, lives are on the line so it’s easy to get caught up and overwhelmed. I try to remind myself that the reason I started my business was to provide the best addiction care possible. Anything else is just a bonus.” – Jerry Haffey, Ambrosia Treatment Center
Most of the days on your business journey you’ll be working very hard, but not if you are working smart. Having a sound business plan in place, a reliable team and sufficient financial backup will make your entrepreneurial journey very rewarding and fulfilling.