EthanYou don’t need to be an expert to understand most businesses’ struggles in their first year. After all, it’s one of the most understood elements of going into business – it will be almightily tough.
Of course, there can be plenty of light at the end of the tunnel. Getting to this stage can be a challenge, and today, we’ll look at some of the main hurdles you need to overcome as a new business during your first year of trading.
Hurdle #1 – The Fear of the Unknown
The big one. This holds back so many people from taking that first step, going all in and starting their own business.
The truth is, no one knows what will happen when they start their own business. It’s a complete leap into the unknown.
You could make a killing and become an overnight success. Alternatively, you could go under within the first few months (although the latter is much more unlikely if you’ve done your research and put a solid plan together).
The key is to take that leap of faith, go all in and give it your best shot. The worst that can happen is that you’ll have to go back to the drawing board and try again.
Hurdle #2 – Not Knowing How to Price Your Product or Service
This is a tough one, especially if you’re offering a service. How do you know how much to charge? How do you make sure you’re not undercharging and missing out on potential profit?
Again, there is no one-size-fits-all answer to this question. You need to research and figure out the going rate for your particular product or service. It’s also crucial to thoroughly understand your expenses, from the big-hitting ones like rent to the ones that can sneak under the radar like insurance.
Once you have an idea of what you should be charging, it’s important to be flexible with your pricing. For new business owners, it’s often a good idea to be slightly more flexible with your pricing to attract customers and get some sales under your belt.
As your business grows, you can increase your prices and implement a more premium pricing strategy.
Hurdle #3 – Dealing with the Competition
Competition is a fact of life, no matter your industry. When you’re starting, it can be tough to deal with the fact that there are already established businesses out there that are offering the same thing as you.
It’s important not to get too hung up on the competition. Instead, focus on what makes your business unique and what you can offer that others can’t.
Hurdle #4 – Trying to Do Everything Yourself
As a new business owner, it’s easy to try and do everything yourself. After all, you don’t want to waste any money on hiring staff or outsourcing work if you can help it.
The problem is, trying to do everything yourself is a recipe for burnout. It’s important to know when to delegate and when to outsource work.
Oftentimes, it’s worth spending a bit of money upfront to save yourself time and stress in the long run.
Hurdle #5 – Cash Flow Problems
Cash flow is one of the most common problems that businesses face, especially in the early stages. It can be tough to keep on top of your bills and invoices, especially if you’re not used to dealing with money in this way.
One of the best things you can do to avoid cash flow problems is to ensure you have a good accounting system. This will help you track your spending and ensure you’re always aware of where your money is going.
Setting aside some money each month into a contingency fund is also a good idea. This will give you a buffer if you run into any cash flow problems.
