By Kayla Matthews
Amidst the growth of successful startups and the fame of their owners, many young people are finding entrepreneurship an increasingly attractive option. While it’s certainly possible to build an impressive business from scratch, it’s not as easy as it may seem.
Entrepreneurs face many challenges that affect not just themselves but also the overall success of their companies. Learning to manage these challenges is a crucial part of being an entrepreneur. However, if you’re not prepared for them, they can feel overwhelming.
To increase the likelihood of your business’ success, you need to be familiar with the common problems entrepreneurs and their businesses face so you can plan to handle them ahead of time. With that in mind, here are four pressure points entrepreneurs commonly encounter and a few strategies to tackle them.
1. A Lack of Funding
Starting a successful business requires a substantial financial investment. Most entrepreneurs don’t have access to the kind of capital they need to fund their businesses on their own. Even so, 80 percent of entrepreneurs use their personal funds to start their companies.
Though it’s good to invest your own money into your business if you can afford to do so, other financing options are available. To protect yourself from potentially life-shaking financial losses, you need to plan ahead and make the most of potential sources of funding. Loans, crowdfunding and money from investors can all help you launch your business without putting your family’s security at risk.
In addition to seeking out sources of supplemental funding, entrepreneurs worried about financial security should set aside money in personal savings in case the business’ budget tightens down the line.
2. Chronic Stress and Overworking
Because they tackle so much every day, entrepreneurs are at risk for chronic stress and other mental health issues. Not only is this a concern for the health and happiness of entrepreneurs, but it can also negatively affect their businesses. An overly demanding, negative or competitive attitude can permeate a company and bring down other employees, as well.
If you’re one of your business’ only employees, you’ll be tackling a huge portion of all tasks. If your entire financial and professional well-being relies on the success of your company — that’s a lot of pressure. Entrepreneurs in these high-stress roles should use some relaxation hacks to avoid burnout.
To prevent additional stress, pay attention to how much you work. Limit your work week to a reasonable number of hours and entirely separate your work and home lives. If you can, delegate tasks to another employee so you can spend your time as effectively as possible.
3. Irresponsible Scaling
Startups can grow fast, which is exciting. However, fast growth requires an entrepreneur to be extra conscientious, as irresponsible decisions made during the scaling process can sink a business equally fast.
Most businesses should grow steadily not swiftly. Though your startup may need to increase its size quickly, decisions made about hiring, firing and spending should all be made thoughtfully.
As you grow your business, think about the company culture you want to foster. Hire highly qualified candidates you want to stick around and fire employees who are causing difficulty as soon as you notice a problem. Spend frugally — even when it seems you don’t need to — to assure your company’s ability to continue growing a year or more into the future, when things might not be going as well.
4. Poor Ethical Choices
Another often overlooked problem faced by entrepreneurs is the temptation to skew from ethical practices and founding missions. Because startups and small businesses are personal affairs grown from scratch, entrepreneurs sometimes struggle to draw the line between what is ethical and what is not.
Nepotism, failure to accurately report income and co-mingling of business and personal finances are all common ethical conundrums entrepreneurs face. Though one misstep here and there may seem insignificant, they can come back to haunt the company in the long run.
To avoid ethical problems in your company, it is best to establish procedures and codes of conduct at the very beginning. You should always consult with an accountant or lawyer to ensure all of your business’ finances are being properly handled.
Running a business is difficult, especially if you’re doing it on your own. Luckily, by preparing for these common challenges, you can start your business on the path to success.
About the Author: Kayla Matthews writes about communication and workplace productivity on her blog, Productivity Theory. Her work has also appeared on Talent Culture, MakeUseOf, The Muse and Fast Company.