Last week we interviewed six individuals who had taken the leap into self-employment in the last two years. Instead of asking how they did this or how successful they were, we decided to ask them a couple of questions on what they found difficult/what roadblocks they faced when starting their own businesses.
The answers themselves were very different, but also extremely useful to anyone starting up a company.
This is why we decided to take this one step further and create a separate article, on the most common small business roadblocks, and more importantly how you can solve or avoid them altogether.
Does the market really need what you are offering? This is a question that’s essential to ask yourself before starting any business. If the market is not there for your product, you need to ask yourself another question, can I create a market for it? If the answer is also no, then you don’t have a business, you just have an idea.
Solution: Validate your idea through market research before starting anything.
Time vs cost
Not only a roadblock but also a large decision for small business owners. Would you rather invest more time into your business or input a large proportion of costs. The decision itself is a roadblock for many people as they simply can’t get the balance right. This is 100% a personal decision and no one can tell you how much to invest into a business in either your time or money. But one key thing to remember is, if you really want to build this business into something substantial, you shouldn’t worry about investing your time, you should enjoy building it.
Solution: Be clear on the long and short term goals of your business. If these are in place the time vs cost argument should resolve itself.
The transition period
Similar to the time vs cost argument above, many individuals start businesses whilst also working in full-time jobs. In our self-employment article, Owain explained his biggest roadblock was finding the time to start his business, whilst still working a full-time job.
Solution: Hustle. Starting a business isn’t easy, if you want the security of a full-time job when you are getting started you are going to have to hustle and work some long nights in order to get to the position you want to be in, without taking the leap too early.
Stay specific to your initial business. One of the most common reasons start-ups fail is they try to diversify too early. Don’t try and do too much at once. Stay with your initial concept and build on it. It is better to be the market leader in a small market than unknown in a huge one.
Solution: Work on improving everything about your current products/services before creating new ones.
Losing money through poor marketing is something we see every day, even by huge brands. Whether this is positioning themselves in locations that simply won’t convert to their product, usually for cultural reasons. Or on a smaller scale, such as placing banner ads on websites that your target audience would never visit. Marketing wastage is the serial killer of small businesses, usually ones that are looking to expand, but don’t know how.
Solution: Test marketing methods and track the results very closely. Lose the ones that don’t work and invest more into the marketing channels that bring you the highest return on investment. Also pick up a copy of “Guerrilla Marketing” by Jay Conrad Levinson, this will dispel any irrational marketing myths you may have picked up over the years.
Funding and capital
Raising capital or funding is a common issue for start-ups. If you’re in a position where you need a lump sum, which realistically you couldn’t raise yourself, then funding or a business loan becomes the only way.
Solution: Start slow and grind. Work 12-15 hour days until you have enough to invest into your own business. If you need smaller loans you can also look at our alternative funding methods article.
Believing the “I’ll help” people/clients when you first start
In our self-employed article Steve Morgan made a very good point that relates to almost every start-up business. He explained he knew about twelve potential clients that said (verbally) I’ll come on board if you ever create your own company. When he did start up, only one of the twelve ‘clients’ actually signed up in the end. This goes to show that not everyone is true to their word, at least not when it comes to actually giving you their money!
This isn’t just limited to the potential clients or customers you may have. Many people receive verbal support from friends and family when starting a business, but when push comes to shove (and it will) and you ask for a favour or some help, suddenly everyone is too busy to help you.
Solution: The solution is simple. Take everything people say with a pinch of salt and never truly rely on anything that’s not agreed either in a contract or payment.
Don’t waste time on the time-wasters
Finally be very cautious of the time-wasters. Whether this be partners in your business, arrogant clients/customers or simply people looking to get free advice or services. Spending time with the people who are only looking to slow you down is the quickest way to stall in a business. The quote by Jim Rohn states: “You are the average of the five people you spend the most time with” so don’t let one of these people be a time-waster.
Solution: Seek these time-wasters out early. Sometimes they may be closer to home than you’d like, other times they might be potential clients looking to get some free services, whomever they are, simply cut ties as early as possible, you might think you’re losing a potential client but you’re actually saving yourself hours of unprofitable work.