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Small businesses are especially vulnerable when they’re getting started. Not only do they face challenges getting the operation off the ground and running, but the inexperience of the entrepreneur often creates problems with otherwise common issues.
3 Issues Your Business Will Have To Work Through
It’s not unusual for small business owners to feel as if everything is going well with the power of positivity when there are numerous potential crises brewing beneath the surface. That’s what inexperience does to a person: it makes you unaware of problems that more seasoned entrepreneurs would sense and already be hard at work to identify solutions.
When there’s no recognition of a problem, it can’t be addressed appropriately. That shouldn’t strike fear in your heart, but it should make you more alert. You should also understand and accept that challenges and problems are a normal part of life as an entrepreneur. As you nurse your business through the early stages of growth, you’re probably going to encounter common issues such as these three:
Financing And Funding
One of the first issues a startup faces — often before it even opens the doors and starts running — is financing. The rare entrepreneur has the ability to bootstrap or self-fund the business in the early stages, but most find they need an additional stream of capital in order to meet crucial goals.
Critical decisions have to be made at this point. The first place entrepreneurs often turn for capital is credit cards. And while this is by far the most common way to fund a startup, credit cards come with inherent risks. They’re often linked to high interest and unfavorable repayment terms, which can sink small businesses and make growth difficult.
Instead of automatically turning to your credit cards for funding, think about your other options. According to Seek Capital, some of the top alternatives to credit cards include SBA startup loans, equipment financing deals, friends and family, angel investors, 401(k) rollovers, and even crowdfunding.
There is no right or wrong way to fund a company. The point is that you ought to walk through all your options so you don’t make a decision based on inadequate information.
Hiring And Outsourcing
Given the limited resources for startups, hiring decisions involve a ton significance. In a large company, a bad hire can potentially be absorbed or even covered by hundreds or thousands of other workers; but a single bad hire in a startup could run the venture into the ground.
Certain facets of recruiting and hiring can only be learned through direct experience. But there are also plenty of ways you can prepare for the process of hiring and incentivizing employees to work. By coming up with a specific plan regarding the type of person you need and how you’ll vet candidates, you can increase your chances of making a smart hire.
On a related note, you’ll also need to think about how you’re budgeting your own time and when it might be more efficient to outsource. A general rule of thumb is to automate something if you have the capability, or when you lack the in-house expertise that your team can adequately handle it.
Legal Structures
It’s entirely possible that you might start up your operation as a sole proprietorship, but you’ll eventually need some legal protection to help keep your business safe. Whether it’s an LLC, partnership, corporation, or some variation of these, incorporating your business is a bridge you may eventually have to cross. Do some research now so you’re informed ahead of time.
Adding It All Up
Issues like these are common. It’s how you respond to them that will make or break your venture and ensure long-term success. While there’s certainly room to make and learn from mistakes, it’s vital to be able to recognize issues early on. When you can do that, you will employ the proper strategies and call on the right people for help.
