When you start a business, you know there are going to be risks. You know you won’t have a steady stream of revenue (at least for a while), you know you’ll be sacrificing potential development in your previous career path, and you know there’s a relatively high risk that your business is eventually going to fail. These are common knowledge, and most new entrepreneurs are prepared for these possibilities with understanding and determination.
But if you’ve ever been in business, you know the challenges you’re prepared for are rarely the ones that ruin you. It’s the challenges you don’t see coming that end up dragging you down, and unfortunately, there are plenty of entrepreneurial challenges that aren’t so readily discussed.
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1. Unforeseen expenses
The meticulous budgeter is going to hate this. Let’s say you’ve calculated all your per-product expenses meticulously, including the cost of the raw materials, the estimated cost of renting the equipment necessary to produce it, and even the labor cost it takes to make a final product. You’ve left no stone unturned, and you’ve calculated a profit margin of 35 percent, which you know to be the average in your industry.
All it takes is one discrepancy to compromise this model. What if the cost of plastic rises? What if there’s a flaw in your chosen machinery that forces you to upgrade to a more expensive model? What if your labor estimates are off? These are only a few possibilities. Undoubtedly, unforeseen expenses will start eating into your profit margins, and it’s up to you to compensate for them.
2. Logistic consistency
When you first start out, almost everything will exist in a state of flux. You won’t have the time, capacityo r even the experience to draft out detailed guides on how to perform every job in the company. As a result, your workers are going to do their best -- but your logistic processes are going to vary.
This isn’t a big problem in the early stages of your startup -- you’ll be improvising in most areas anyway -- but when it comes time to start formalizing your processes, you’re in for a major headache. Try to consolidate practices as much as possible and strive for consistency from the beginning.
People are going to take advantage of you. That’s a reality of modern business. If you serve customers via an ecommerce platform, they can use your return policies against you. If you serve high-level business clients, they could stiff you on the bill. You could even be taken to court over a trivial matter in an effort to get money out of you.
Obviously, you know that scams exist, and that people will do whatever it takes to make a quick buck, but after establishing a good pace of business, it’s easy to be blindsided by an unexpected source. Always keep an eye out for potential fraudulent actions.
Startups demand a lot of hard work -- and not just from you. Long hours, weekend work, major setbacks and periods of high financial stress are common. When you start out, you can logically prepare yourself for these instances, but when they actually come, their psychological effects are more trying -- and that goes for you and your workers alike.
Staying motivated is critical to keep the business alive, but motivation isn’t something you can buy. There’s no “secret” to motivation, and that’s what makes it hard to sustain. Still, as a leader, it’ll be your job to sustain.
Few people talk about the challenge of loneliness that entrepreneurs face. You’ll be watching the numbers, taking on the debt, taking the brunt of major blows like client departures, and stressing about every decision you make. But the worst part is, you can’t express your fears and stresses under the guise of the unshakeable leader.
Furthermore, the long hours and working weekends will leave you with less personal time and time with family. You’ll feel isolated and unable to seek or get help. It’s a tough position to be in, but one you’ll have to overcome if you want to keep moving forward.
I’ve broken my own claim by telling you about the challenges purportedly nobody would tell you about. Use this information wisely. You might accept some of these and start preparing actively to handle them, or dismiss others as being rooted in anecdotal evidence. That’s for you to decide, as long as these possibilities are all on your radar.
If there’s one solid takeaway I can offer you in light of these challenges (and more to come), it’s this: stay flexible. You never know what’s around the corner, and you certainly can’t prepare for everything, so stay aware of your surroundings, and don’t hesitate to adapt when the time comes.