3 Challenges Every Entrepreneur Must Overcome
No matter the industry, these universal roadblocks require business owners to balance immediate needs with longer-range strategies.
Entrepreneurship long has been idealized as an integral part of the American Dream: with hard work, anyone can make it. Even with a proliferation of technology and tools to help entrepreneurs run their businesses, few ventures last the distance. Many fail even to begin. A spate of well-publicized startup failures as well as a reported drop in business startup rates appear to signal the entrepreneurial world is becoming more sink than swim.
Perhaps that's because entrepreneurs are ill-equipped to overcome the inevitable roadblocks. If you're feeling overwhelmed, it's important for you to recognize you aren't alone in your struggles. You can and should reach out to others who have taken similar paths.
1. Avoiding burnout.
The passion that often makes us entrepreneurs successful also can be our downfall. Many of us devote time, money, passion and energy to our ventures. We run the risk of being consumed if we stay plugged in all the time. We need time to disconnect.
A recent Xero survey found that 14 percent of small-business owners believe they can completely check out while on vacation. Contrast that with 54 percent of American workers who feel the same way. Eighty-five percent of small-business owners surveyed also admitted to working while on vacation.
It might not be realistic for you to check out completely, but you will enjoy your vacation time more fully if you plan ahead and set expectations. Before you leave, touch base with all your employees and advisors to make sure everything is in order. Consider designating time periods during which you can be contacted -- perhaps an hour every morning. This will allow you to keep your finger on the pulse rather than feeling as if you’re on call every hour of the day.
Cloud-based software can help afford more opportunity for vacation, rather than preventing it. Many entrepreneurs employ the 80/20 rule while on vacation: 80 percent of time is dedicated to relaxation, and 20 percent is spent on work.
No matter which solution you choose, it's essential to carve out time to relax, truly recharge your batteries and maintain a healthy mindset. If you don’t take care of your mental health, your business ultimately will suffer.
2. Tracking cash flow.
Cash flow is the lifeblood of any small business. In fact, poor cash-flow management is one of the main reasons businesses fail. Tracking cash inflows and outflows may not be the easiest or most glamorous part of running a small business, but it does separate a good entrepreneur from a great one.
Creating a clear cash-flow management plan is critical to ensure your business' survival. Fortunately, you can leverage one of many affordable solutions to get a handle on this issue. An online accounting platform can help you track finances and get paid faster. If your budget allows, take the guesswork out of the equation by engaging an accountant or a bookkeeper. Confidence in your numbers will help you sleep better at night. And that's priceless.
3. Raising capital.
At pivotal moments in your business’ lifespan, you'll need to raise funds so you can innovate and grow. If you’re a first-time entrepreneur, you often will be at a disadvantage because you lack an established network or a source of revenue from a previous venture.
While many people consider only the traditional bank-loan route, the modern entrepreneurial landscape offers alternative funding streams. You could consider equity or rewards, crowdsourcing options, incubators, loans or grants, angel investors or investment companies. Options such as crowdsourcing mean you're not limited to your own local network -- you can leverage the funds of investors and supporters from all over the world. Not every option will be right for your business, so it pays to do some research to find out which is the best fit.
Being an entrepreneur undoubtedly is a hugely rewarding experience. For the most part, it's empowering to throw yourself into something you’re wholeheartedly passionate about and lead your own crusade. At the same time, though, forging your own journey can be trying. Recognize that you have a myriad of resources at your disposal, including the people and the technology to help you find solutions to any issue.
Ryan Himmel is a CPA and financial technology executive who has dedicated over a decade of his work toward providing solutions to help accountants and small-business owners better run their firms. Himmel currently leads financial partnerships in the Americas for Xero.