If you’re considering starting a business, it’s a good idea to know the challenges you may face so that you’ll be prepared to overcome them. A lot more is involved in business than just making a product and selling it. Here we will cover the biggest challenges you may face when trying to get your business up and running.
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Every business will have some costs to get started, even if you are just offering a service. You will probably need at least the following:
- Registering your business and business name
- Business insurance
- Licenses and permits
- A website
- Marketing costs
Many businesses can start with just these items, which should total less than $2,000, and some businesses can cost significantly more. This can often be a challenge for entrepreneurs, and many do not start businesses because they don’t have the funds. However, there are several financing options for a new business.
- Bank loans: This is a common method but getting approved requires a great business plan and strong credit history.
- SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain bank approval via an SBA-guaranteed loan.
- Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
- Venture capital: Venture capital investors take an ownership stake in exchange for funds, so you’d be sacrificing some control over your business. This is generally only available for businesses with high growth potential.
- Angel investors: Reach out to your business community in search of people interested in investing in early-stage startups in exchange for a stake. Angel investors are always looking for good opportunities.
- Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
- Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
- Personal: Self-fund your business via your savings or the sale of property or other assets.
Finding a Market Niche
When starting a business, you’re bound to face competition. The problem for many business owners is that they don’t look for a way to stand out from their competitors. To be successful, you have to find a way to get a competitive advantage.
Research similar businesses in your area and online to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. What’s missing in the market that you could provide? What do other businesses not do well? How can you differentiate your business?
You might consider targeting a niche market by specializing in a certain aspect of your industry. For example, if you’re starting a watch business, you could specialize in vintage watches. This could jumpstart your word-of-mouth marketing and attract clients right away.
You can also target your products to a specific market of people. You might want to target young women, so you’ll want to make your product or service most appealing to that group. You also will target your marketing to that group. For example, you can probably find young women on TikTok or Instagram.
In any case, you need to find some way to differentiate your business so that you can break into a competitive market.
Once you start to get clients, your business should start to grow from repeat business and referrals. The challenge is finding those first clients to get the ball rolling.
Website development is crucial because your site is your online presence and needs to convince prospective clients to buy your products. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable but figuring out how to build a website can be time-consuming, so it may be better to hire a web designer or web developer. They can also provide SEO services.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
- Facebook: A great platform for paid advertising, allows you to target specific demographics, like men under age 30 in the Santa Fe area.
- Instagram: Same benefits as Facebook but with different target audiences, usually younger.
- Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Buy Now”. This can sharply increase purchases.
- Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.
There are a host of other marketing techniques you can use as well:
- In-Person Sales – Offer your products at local markets
- Post a video – Post a video about your product or service.
- Email marketing – Send regular emails to customers and prospects.
- Start a blog – Start a blog and post regularly. Share on multiple sites.
- Seek out referrals – Offer incentives to generate customer referrals to new clients.
- Press releases – Do press releases about new products, sales, etc.
- Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
- Pay-per-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.
- Influencer marketing – Pay people with large social media followings to promote your product or service. You can find micro-influencers with smaller followings and lower rates.
- Make a podcast – This allows you to make a personal connection with your customers.
Starting a business is exciting, but it does come with challenges. However, entrepreneurs overcome these challenges every day, and so can you. You just need to be prepared with information and a strong business plan, and you can be successful.