How to Solve 5 Common Challenges Every Entrepreneur Faces
“Modern life in South Africa offers more tools than ever to solve the top five challenges every entrepreneur in our country will face.”
Entrepreneurs face many challenges, and in these tough times, it can seem even more difficult to get your start-up running well. With so much uncertainty in our economic climate, entrepreneurs need all the support they can get. That’s why we’ve found solutions to the top five challenges each entrepreneur faces in South Africa.
1. Deciding What to Sell.
With so many innovative and exciting products and services out there, choosing what to sell can really influence your profitability. How do you choose a market segment to target and which products to go for? If you’re having trouble here, you can recruit an individual with talent and experience in this area.
You could hire a freelance researcher with experience in the field you’re looking at. They can research and report on the niches they suggest, what your potential profit margins could be, and a list of strengths and weaknesses, opportunities, and threats for each option. You can use this report to help you find the right things to sell or get further opinions before you make the final choice.
2. Taking on the Cashflow Challenge.
Without adequate cashflow, many new businesses will struggle to survive. Often entrepreneurs are stuck in the gap between when bills are due and when clients pay. Delayed invoicing is a common issue in the entrepreneurial world. Once you have invoiced, the client will only pay after 30 further days. While you wait for their payment, you still need to pay your employees, mortgage, bills, and suppliers. What’s more, some clients just don’t pay, putting a new business under huge financial pressure.
There are a few ways to remedy the cashflow challenge. Start with proper budgeting and never overspend. Next, require a down payment from clients for your products or services. All the expenses you incur with the project should be covered by this down payment. The down payment can also include a small profit margin so you can pay your employees.
In some cases, you can get insurance to help you manage your trade credit. Hollard Insurance, for example, offers trade credit insurance options that can cover non-paying debtors in certain circumstances. Find out if your business insurance includes cover that can help you manage your cashflow.
Another way to improve cashflow is to require that clients pay within 15 days instead of 30 days. Any overdue payments can then be addressed and leave ample time before the next 30-day period. Many businesses also require immediate payment as soon as a project is completed, so don’t be afraid to demand the same if necessary.
Your cashflow can also benefit from building good relationships with suppliers and vendors. Ask them for 45, 60, or even 90-day invoices that will give you more time to pay the bill. In the meantime, you can collect on invoices from your clients and ensure you have the money to pay your suppliers. With a good relationship established, your vendors and/or suppliers should be more than willing to work with you on this point.
3. Managing Your Time Effectively.
At the inception of a business, the entrepreneur wears all the hats. You’re the invoicing agent, the sales agent, the packaging team, the bookkeeper, the telemarketer, the driver, and more. As such, time limits can be a big challenge.
Figuring out how to manage your time can really improve your business success. There are many methods out there, but you can use these tips to improve your own time management. Use goals to guide your day-to-day tasks. Start with big goals broken up into lists of medium-size goals. These goals can be split into smaller goals, which can be split up into daily or weekly tasks. By taking on the small daily task, you contribute towards your lifetime goals.
Second, assess your tasks and eliminate unnecessary to-do’s. You can also delegate tasks that can be completed by someone else and focus on the tasks that are most connected with your larger life goals. If you find yourself wasting time on unnecessary tasks, you can use tools that help you remain focused on the important tasks at hand, including something as simple as reminders.
4. Hiring & Delegating to Employees
As a start-up business owner, your ability to do everything is limited. At some point, you’re going to need to hire help. The challenge is finding the right person for the job and effectively delegating tasks to them in a way that doesn’t leave you having to re-do the tasks.
Your options are to hire contractors or employees. When searching for candidates for either, be exclusive and detailed in your job specifications. This can save you a lot of time. Instead of having to interview a list of candidates that aren’t ideal, you can really narrow it down to only those likely to fit the bill by being more specific in your adverts.
When interviewing prospective employees, it’s a clever idea to treat the candidate as a possible partner rather than a minion who may or may not survive your scrutiny. People like to feel as though they are a part of something bigger. Proper references are important, and taking your time to find them is worth your while.
The same can be said about clarifying expectations from your side and from the prospective employee’s before hiring them. When expectations are clear from the get-go, you can avoid miscommunications, confusion about their responsibilities, and what rewards they are seeking compared to what you’re offering. The aim is a mutually beneficial long-term employee-employer relationship built on honest communication.
When delegating tasks to the individual you choose, keep this clear, detailed communication going. Don’t assume they will think things through the way you do. Rather give them all the information, insights, and tools necessary to complete the task, along with a timeline. The more detail you can give about how the task should be completed, the better.
5. Standing Out from the Crowd.
Finally, getting your business to stand out is a big challenge. Even if your product is of the highest quality and your service is unrivalled among peers, that doesn’t mean prospective customers are aware of it. The way you put yourself out there can make or break your growing business.
The modern world offers a host of ways to market your business, from print and billboards to Google AdWords, digital remarketing, and social media advertising. When choosing which marketing avenues to use, consider primarily which channel will give you the most return on your investment. If you spend R10,000 on advertising and marketing, you will want to earn back much more than that.
If you don’t have a lot of experience with marketing, it’s a great idea to hire someone who knows what they’re doing. Look for someone with experience who can offer strategy and who can report on the level of success of your marketing campaigns. This makes your marketing much easier. You can give them a budget to work with and a goal for the returns you want. They can then craft an effective plan to reach the goals you’re aiming for and even offer guidance where needed.
DISCLAIMER: The information provided in this article is meant for informational purposes only and should not be construed as legal, medical, or financial advice. Facts stated in this article are correct at the time it was published.