Treasurer Joe Hockey has given the small business community much needed support through the recent budget.
With the $484.2 million Entrepreneurs’ Infrastructure Program giving small business up to $20,000 in loans, a cut in company tax for those earning below $5 million taxable income and other measures, there’s a lot to smile about.
These decisions could not have come at a better time. As I had highlighted in a recent article, entrepreneurs play at integral role in strengthening our financial future. Grants allocated by the government and the ones provided by the private sector such as the Kickstart Your Business Grant we give out at Forming Circles, sustain and motivate the small business community whilst encouraging new entrants.
If you are in a 9 to 5 job and are thinking of starting your own business, or are a sole operator or small business aiming to grow, now is the best time. You will face challenges as an entrepreneur. But the good thing is that most challenges are the same that others in your situation have confronted before and overcome. As with leading a positive life, you learn from others and apply to your business.
In my experience of having reviewed over 1,000 grant applications, talking regularly to entrepreneurs and being a businesswoman myself, here are a few common challenges and easy suggestions to manage them:
1. Pick the right idea: Talk to many, many people about your idea and research it fully. Belief in a product or service is great. But it’ll only get you that far if people aren’t willing to spend money. If you don’t have an audience as yet, it is you and your vision that people are buying into – not just what you sell. Failure is often a result of lack of preparation and acceptance of what is achievable by you.
2. Quality above all else: As an entrepreneur, you are constantly juggling payroll, bookkeeping, operational, manufacturing, customer service, issues management and many other tasks. More so when business is growing marginally but not enough to employ a support team. This is when most businesses drop their game. Complaints are often highest post your busiest time, when you are operating with limited manpower.
Every customer is your indirect salesperson or brand advocate. Ensure their loyalty by giving them your best. If quality is being compromised, don’t take on more customers.
3. Finding the right customers: The world is becoming increasingly niche and segmented by individual tastes and preferences. You needn’t look further than online communities on Facebook, Twitter, Pinterest and Instagram to know so. Smartphones, social media, integrated communications and touch point services are making it easier for us to get the right messages to our audiences.
Understand who your customer is and build that community. Don’t waste time on people who do not reciprocate interest in your product. Empower your customers to decide what they want by engaging with them. Pushiness often results in wasted effort and negative brand perception.
4. Initial investment: At the early stages, when faced with investment decisions, many entrepreneurs choose to bootstrap a significant amount to get the business of the ground. It then results in a vicious cycle of trying to get more customers, trying to widen the business profile and the risk of investments not converting.
If you don’t have funding, start small and earn top dollar before you invest more. Make success your only option for more funding. Aim for higher profit margins than just increased revenue. Get a sustainable cash flow process going before investing more.
5. Preparing for uncertainties: We all find great discomfort in uncertainty. That of not having a regular paycheck, finding new customers, dynamic economies, etc. Current economic climates and fears of recession compound this feeling as the issues are more pronounced.
The only way you can put your fears to ease is by confronting them and having a plan to tackle uncertainty. Plan for the months when cash flow could be low and for a contingency if your product or service is replaced due to market innovation, or if you are hit with a recession. This always seems like the easiest challenge to confront, but often the one relegated to last place by business folks.
6. Finding the right employees: This is an age-old problem that no one has the definite answer to. Trial and error is the only way. Employing someone to join a small business is like inviting them to the family home. It is a close relationship that is often filled with good chemistry, but can sometimes be dysfunctional.
In your role as an employer, you are the mentor, leader and paycheck provider to the people you bring on board. Be prepared to do all three well. Beware of becoming a sounding board for someone else’s issues and handholding them too much. Remember that leadership is defined by creating more leaders, not just by leading. Give your employees a voice and help them grow with you, so they stick around when the going gets tough.
As you start or grow your business, you will be confronted with these and many other challenges. Always remember that you are not alone and millions before you have faced similar issues. Reach out for the helping hand – be it to Joe Hockey’s new funding program or to someone you respect for mentorship.