5 Struggles Entrepreneurs Face When Starting A Business
Many people dream of owning their own business, but only a small percentage of those embark on what is often an intimidating and assuredly risky path. One of the main reasons people back away from starting a business is the long list of items they need to learn before they can even open their doors.
Let’s look at some of the common struggles facing new business owners.
Pre-Opening Obstacles
When envisioning business ownership, people think of a busy store or office, employees and customers interacting, and a glowing sense of satisfaction at a job well done. It’s easy to skip over the concerns about legalities, taxes, insurance, and a host of other tedious details that are required to make business ownership possible.
Choosing A Business Structure
Before you can open your doors, you must start by choosing the right business structure. Choosing between a sole proprietorship, a partnership, an LLC, or a corporation has long-ranging implications. Making the wrong decision at this critical - and initial - juncture can impact future liability, taxes, and regulations that must be followed. It’s not a decision to be taken lightly, or without guidance from an attorney, accountant, or advisor.
Contracts and Agreements
From leases to vendor agreements to client contracts, the number of legal documents a new business owner must review and understand can be overwhelming. Having a trusted legal advisor is essential for new business owners. Overlooking key components or not understanding the implications of these agreements can leave a business and its owner unprotected.
Funding, Accounting & Financial Management
This is probably one of the most challenging aspects of business ownership. Just getting the funds together to start will often keep budding entrepreneurs from ever taking the leap.
Initial funding can be acquired through loans or investors if self-funding isn’t an option. But it’s essential to have enough liquidity to be able to keep your fledgling business running for 18 months to 3 years before a profit will actually be realized.
During the start-up phase and throughout business ownership, managing cash flow, accounts receivable and payable, and basic overhead can be a drain on a business owner’s time. Having proper accounting systems in place and being able to correctly forecast expenses and income is a massive lift for most new business owners.
Ongoing Obstacles
Compliance - Employment, Tax, and Regulatory
The legal aspects of opening and running a business can weigh heavily on a new business owner who has little to no experience. Business owners must be aware of:
Labor laws
Employment regulations
Tax regulations - income, employment, sales tax, etc.
Licensing and permits
Industry-specific regulations
Failure to comply with any of these items can result in fines, lawsuits, and, in the worst-case scenario, business closure. And, this isn’t just a start-up problem; keeping on top of changes and maintaining the appropriate records and documentation is an ongoing concern.
Attracting Customers & Marketing
Once all of these fundamental decisions have been made, a new business owner needs to dig into the problem of attracting customers and establishing an effective marketing campaign. Understanding what your customers need from you and your product or service, how to reach them, and building a loyal customer base is not easy.
Most new business owners are passionate about what they do, but are not adept at marketing. Without an effective advertising and marketing plan and the finances needed to run it, grabbing the attention of customers and growing your business is infinitely more difficult.
How to Make Opening a Business Easier
While all of these obstacles can easily become overwhelming and discourage someone new to business ownership from starting out. What many people looking into business ownership neglect to investigate are the opportunities available to them in the franchising industry.
Instead of facing these obstacles alone, recreating the wheel, and making rookie mistakes, entrepreneurs can buy into franchise ownership and receive the support and guidance that makes business ownership easier and less intimidating. Franchisors support new business owners by providing assistance with funding, providing access to fully vetted tools and software systems, helping with marketing, and a whole host of other items that ease the transition into becoming a business owner.
Helping those interested in business ownership understand the many benefits of franchising will help grow individual brands and the industry as a whole.
