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The entrepreneurial life is full of uncertainties and severe challenges. 'Routine' is a distant dream in the life of an entrepreneur who constantly needs to resolve issues and maintain a high level of focus to make the best decisions. The challenges of entrepreneurship are well-documented, as outlined in Table 1. Entrepreneur's top concerns are finding customers, gaining access to capital to fund and grow the business, and overcoming self-doubt and fear.[1]
While the list of entrepreneurial challenges can sometimes seem daunting, we'd like to share some of our insights in terms of the most challenging aspects of running a business and how entrepreneurs should learn to overcome them. In Part 1 of this two-part series, we will focus our discussion on the following: Fundraising and Cash Flow, Delegating Tasks, Time Management, and Being the Visionary.
Entrepreneurial Challenges
1. Fundraising and Cash Flow
The harsh reality is that the market doesn't care about your business aspirations. Your company will only stay afloat if you ensure a consistent cash inflow. In a previous post, we discussed how seventy-five percent of all start-ups fail[2] for various reasons. Believe it or not, most new businesses fail to take off due to a lack of cash flow management.
Therefore, an entrepreneur needs to pay attention to cash flow and figure out the projections both of incoming revenue and total costs. Moreover, you should always build some financial reserves to fight extreme financial crises. I took this approach when I started my executive consulting firm. I'm glad I did because when COVID-19 impacted the U.S., our organization had just onboarded a Chief Marketing Officer and those cash reserves provided me with some peace of mind. At the same time, I was able to focus on how to move the company forward.
As a start-up, you will depend on your ability to raise funds. So, take complete responsibility to raise capital for your business. This will require an in-depth understanding of the process and developing a winning pitch deck. To accomplish this, you will have to master storytelling and capture the imagination of investors in a matter of a few minutes.[3]
2. Delegating Tasks
Business owners and entrepreneurs often struggle with delegating tasks that they think they perform best.[3] This challenge is quite common and needs some serious attention.
Entrepreneurs have to make countless decisions every day. Therefore, holding the reins to every aspect of the business doesn't make sense. You need to learn how to delegate tasks that others can do for you and recognize this may require you to take a risk and onboard new employees. People failing to learn the art of hiring, outsourcing, or delegating find themselves stuck with running the day-to-day operations of a small business. As a result, a start-up might never scale faster than its competition and will slowly lose value in the market.
We suggest you start delegating by finding human talent that can generate equal or better results than you. Invest in them to ensure they learn quickly and help you scale your business rapidly. Being an effective leader and entrepreneur is about identifying talent and investing in them through mentorship. Initially, it will require you to sacrifice your own time to invest in someone else, but the return on investment will be worth it!
3. Time Management
We've often heard the saying "time equals money," right? Well, not really! It's the 'well managed' time that turns into money. Time management is a skill that can easily make your business grow quicker than your competition.
We all share the same amount of time. Still, some entrepreneurs grow faster than others. Why? Simply put, they have learned how to leverage the hours not spent sleeping.[3] Set boundaries by figuring out what's more important in your life. Prioritize! Create more time in hand by delegating tasks. Use automation to get rid of repetitive business operations and follow essential time management tactics and get your entrepreneurial journey on the fast lane.
4. Being the Visionary
Vision is everything! It will keep you from impulsive decision-making and allow everyone involved in the business to stay focused. Even delegation of tasks will work better only when the people involved share the same vision and goals.
Develop a clear purpose or vision for your company to steer your boat in times of crisis. Entrepreneurs need to create and stick to a vision statement for the enterprise. It will involve developing a strategy to make crucial business decisions in the future. So, how can you overcome the challenge of creating a vision?
Find out what impact you want your company to have on the market. Figure out how you want the customers to perceive your brand. Talk about the company culture you wish to develop in the near future. A vision statement can help you bridge your company's present and future goals. Once you pen down the vision, you will have enough space for yourself to stay innovative and let your creative mind take over.
Keep reading!
We have shared some of the most challenging aspects of running a business that every entrepreneur should be aware of. Indeed, being an entrepreneur can help you achieve some of your wildest life goals. But that will only materialize if you never take your eyes off the possible entrepreneurial challenges. After all, one needs to acknowledge the obstacles before overcoming them. Did you enjoy reading this post? Don't forget to check out other informative posts on our blog!
People also read
· https://www.leaderessentialsgroup.com/post/is-stress-a-constant-part-of-your-life-as-an-entrepreneur
Dr. Cristina Rosario DiPietropolo is the Founder and Chief Executive Officer at Leader Essentials Group, with extensive experience across multiple industries and highly skilled in the areas of strategic planning, organizational behavior, human resource management, change management, leadership, and digital marketing. Over ten years of teaching experience as a university professor of management, with a special focus on leadership in entrepreneurship, organizational behavior, and international management.
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[1] Looze, J., & Desai, S. (2020, May). Challenges along the Entrepreneurial Journey. Ewing Marion Kauffman Foundation. https://www.kauffman.org/wp-content/uploads/2020/05/Challenges-Along-The-Entrepreneurial-Journey.pdf.
[2]Blank, S. (2013). Why the lean start-up changes everything. Harvard Business Review. Retrieved from https://hbr.org/2013/05/why-the-lean-start-up-changes-everything 06/14/21.
[3]Cremades, A. (2019). The 10 biggest challenges every entrepreneur faces (and how to Conquer Them). Forbes. https://www.forbes.com/sites/alejandrocremades/2019/03/02/the-10-biggest-challenges-every-entrepreneur-faces-and-how-to-conquer-them/ 06/14/21.