By Damilola Faustino
Thinking about starting a new business? Running your own company is rewarding, but there are challenges. Perhaps not surprisingly, some of the biggest hurdles come when you’re a first-time entrepreneur just getting your company off the ground. New business owners need to build all of their processes from scratch while complying with so many rules. To prepare, consider these top challenges you’re likely to face.
Complying with tax laws and other regulations
Business is very important to the government. Hence, you will have to comply with a host of regulations, depending on the business type. At a minimum, find out what licensing requirements apply to your business and the taxes you are meant to pay. You even need a lawyer to clarify things for you. Do not hesitate to get one.
Handling cashflow issues
Most companies don’t start out with tons of cash, but you’ll need money to buy materials, pay for office space, cover marketing expenditures, and pay yourself. This is regardless of whether your business is online or offline. Figure out where this money will come from, whether it’s savings, a business loan, or investors. And, have a plan for how your company will collect and spend money. Do not forget to weigh the pros and cons of each different method of financing, and have a plan in place for how you’ll get to profitability.
Reaching your target market
One of the most challenging things for new business owners is to build up a client base. You may have an awesome product idea or be the best in the world at providing a particular service — but if people don’t know about your business, you aren’t going to have any customers. To reach your clientele, decide who your target audience is and consider what approach is best to reach them. Reaching your target audience is not difficult these days because you have social media to reach your audience.
For small businesses with perhaps five to ten employees, increasing profits is the biggest challenge. There are any number of reasons, but usually, it comes down to an inability to remain a low-cost leader against the competition (who may have access to better resources and economies of scale). The only answer is to innovate and optimise constantly and stay one step ahead of your competitors.
Almost every business needs to sign contracts. You may need to sign a lease for office space, contract with suppliers, or enter into service contracts with customers. When negotiating contracts, read the between the lines. And, if you’re not 100% certain you understand every contract term, get a lawyer to look it over. You’re bound by agreements you sign, so don’t commit to something if you can’t follow through or understand.
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