Greetings to all the aspiring entrepreneurs out there. Very recently we spoke about some common habits of the most successful entrepreneurs, and as promised, this time we’re going to tackle some of the biggest challenges new entrepreneurs face, along with effective strategies to overcome them. So then, without any further delay, let’s begin.
We’ll start with a problem that doesn’t ever seem to go away. Yes friends, rising costs and inflation can undo the hard work and preparations of even the most frugal and savvy of entrepreneurs. If the costs of supplies and labor are putting the squeeze on your everyday operations, you could seek temporary solutions such as small business loans, credit cards, and even -gulp- your personal savings. Yes, these solutions may help in the short-term, but they can also be counterproductive and may lead to further financial trouble in the future.
The best way to combat rising costs and inflation is to learn to roll with the punches. One of the most important things to remember is that as a small business owner, you should keep a watchful eye on the market so you can identify trends and impending trouble. This will help you to be proactive in your decision making, and you’ll be able to adapt more quickly.
First, take a look at all your business expenses. The chances are there are some services or products that you don’t really need or that you haven’t been using. Cutting unnecessary expenses is an easy way to help lessen the impact of rising costs and inflation. Another tactic is to work with your suppliers to negotiate better prices, or to find less expensive suppliers all together, if you’re able to.
Always make sure that you send invoices right away, and that you follow up consistently on any past due invoices. A good old-fashioned calendar, reminders in your phone or device, or task management software are all great ways to keep track of your invoices, when you sent them, and when it’s time to follow up. Lastly, you may want to take a look at your pricing strategy. If your costs are too high, it might be time to raise your prices. Just be sure you’re being reasonable-you don’t want to alienate your customer base.
Supply Chain Issues
Having a cost-effective, efficient supply chain is integral to any successful business; however, as the last few years have shown us, even if your supply chain is a fully optimized, well-oiled machine, it must be resilient when faced with overwhelming demand, problems with shipping, and disruptive global events.
Planning ahead will help mitigate any unforeseen supply chain issues you might face. This includes building up a buffer stock of your inventory so that you can deal with a sudden increase in demand, or in the event your supplier is slow or is otherwise experiencing shipping issues. Depending on the products and services you are offering, you may have to get creative when keeping a buffer stock. In certain cases, the solution might be your personal garage, or a monthly storage space. As we said above, if you’re keeping your eye on the market, you should be able to anticipate increased demand and adjust accordingly.
Another way to prepare yourself for supply chain disruption is by having a diverse network of suppliers. In the event your main supplier is experiencing issues, you’ll have a number of back-ups you can go to if you need materials or product in a pinch. Do your best to seek out back-up suppliers who maintain similar quality as your main supplier, so that your offerings don’t suffer as a result.
Dealing with Rejection
Get used to hearing “no” a lot. If there are any attributes that a young entrepreneur should seek to develop, it’s resilience and the ability to deal with rejection. From the earliest stages in gaining funding, all the way to launching your newest product, you’ll meet resistance. Changing your perspective is key to making rejection work for you.
It can hurt when you put all your time and effort into something, only for someone else to tell you it’s not good enough, or that it’s not worth their time. Try to see any feedback, even negative, as a positive thing. In other words, perhaps certain criticisms about your offerings can lead to improvements. Do your best to not let your emotions get in the way of your success, and take any constructive input into consideration.
If you’re confident enough to take your ideas and go out on your own, then you have what it takes to make it. Believe in yourself and what you’re trying to offer, and be open to constructive criticism-there’s always room for improvement.
With that, we’ve reached the end of the first part of our list of challenges that young entrepreneurs face. Next time, we’ll talk about issues such as dealing with the everyday ups and downs of running a small business, the loneliness of the entrepreneur, and more-so stay tuned for part two!
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