Entrepreneurs’ Biggest Challenges and How They Overcame Them
What’s been your toughest hurdle as an entrepreneur? Cashflow, marketing and working out a sustainable business model are common problem areas. Five business owners explain their toughest challenge and small business mentor Ed Goodman offers his solutions
Julie Creffield is the founder of Too Fat too Run, a business that offers online coaching programmes and retreats, which was developed from Creffield’s popular running blog. She explains the difficulty of overcoming other people’s criticism of her business idea:
“The biggest challenge for me was (and still is) ignoring the people who told me it wasn’t possible. Some think that what I do is a gimmick or that it is duplicating what is already out there. Right at the start, a business advisor told me what I had was a hobby and that you could never earn a living from being a blogger.”
Ed Goodman says:
“For a start, forget what other people tell you and find out the facts for yourself. Sure, you may be duplicating what’s out there, but so do many other successful businesses.
“Start with your end result in mind, then you’ll know where you’re going and you’ll be better able to ensure that the steps you take are always in the right direction.”
Brand Exposure
Charlene Laville, founder of London-based Nizz cosmetics, which produces lipstick suitable for vegetarians, has found it hard to win press coverage.
“The biggest challenge so far has been exposure — I’ve had to compete with other cosmetic brands that have a much bigger marketing budget.
“Once I’d developed my product and concept, I needed to create a buzz. It was tough as I left my job to start my business, so I didn’t have that financiTheal back up. Being such a small business in a highly dominated market you to have a niche or you will go unnoticed.”
Ed Goodman says:
“Firstly, Charlene, you’re right, you can’t compete with international beauty brands, but that doesn’t mean you can’t make a successful business out of your product. Look to see who can give you the exposure that you’re after. There are bloggers and vloggers out there who are successfully speaking to your target audience and it would be worth establishing a relationship with them, which may lead them to blog about your product.
“Make sure you build that relationship first (find out what the blog is about, whether they try or endorse any other products, why you think they would be interested in your product), rather than dive in with a pitch.”
Finding the right model
Saurav Chopra is the CEO and co-founder of London-based startup Perkbox, which offers business services and employee benefits packages to startups and small businesses. He describes the hurdle of developing a sound business model:
“Our business model was fundamentally flawed when we started. We’ve had to pivot our model three times before it became truly profitable. After an initial investment round we launched our service — a kind of discount scheme for small businesses.
“But, within three months, the business started haemorrhaging cash. Alarmingly, we found ourselves with just three months worth of money left in the bank before the business became untenable. In hindsight we were spending carelessly and it seemed that consumers were falling out of love with discount deals. We had massively misjudged our spend and our approach.
“We resolved to dramatically change our business model, make it profitable within three months and use the profit to reinvest in the business growth.”
Ed Goodman says:
“If you start a growth phase in your business it is usually because you’ve done something right. For example, a new product or service has been launched successfully, marketing has been effective, the sales are coming in and you’re delivering efficiently.
“Slow down and be sure that you’ve got the right foundations laid before you build on them. For example, be very clear who your target customer is, what problems they have and how you are solving them. Then be sure the message to them is loud and clear.”
Cash is king
David Allen, managing director of Allen Signs, based in Lincoln, has found that cashflow problems have cropped up in his business, which employs 15 staff.
“Allen signs is a sign manufacturer and vehicle livery (sign writing for vehicles) business, and we also have a digital print business. The company was formed in 1965 by my father who was a vehicle painter and repairer. He was also a traditional signwriter, which lead us into sign-making in the early 70s.
“In the years I’ve been at the company, cashflow has been difficult at various times and bank funding got difficult for us around 2004. We had to look closely at the money that we’d borrowed as well as our business costs.”
Ed Goodman says:
“As I’m sure you’ve heard numerous times, cashflow is the jugular to any business. What leads most businesses to problems in this area is a lack of orders and late payments. It’s much easier to generate orders with existing customers than it is to find new ones. With this in mind, it’s always worth going back through your order book to pick up relationships with customers.
“Secondly, think about what you can do to encourage customers to pay you sooner, especially more troublesome ones. Finally, I’m a big fan of bootstrapping wherever possible — but make sure it’s in a way that doesn’t impact on the delivery of your service or product.”
Intellectual copyright
Amanda Peffer, founder of children’s clothing brand, Blade and Rose, describes how protecting her idea has been her biggest business challenge:
“I design baby apparel; the primary product is leggings for babies. I founded the company during maternity leave, taking the name from my children’s middle names — ‘Blade’ and ‘Rose’.
“I did a lot of research and didn’t find anything on the market like the products I had planned — high quality leggings with cute designs on them. So I started designing them and contacting manufacturers. Once the designs were ready, I went to a few trade shows. The leggings received a good response. I came home delighted with a good number of leads from independent baby boutiques and gift shops.
“After six years of hard work and development, I’ve found that other brands are now selling something similar. All of our designs are copyrighted, but I cant copyright a concept.”
Ed Goodman says:
“There will always be other brands offering the same product or service as you, but that doesn’t mean you can’t still build a successful business. Your story is what will help you to stand out — for example, what inspired you to come up with your products? What is the story behind your designs?
“Make yourself a bigger part of your brand and sell that story to the independent baby boutiques, and their customers, who gave you such great reviews when they met you.”
This advertisement feature was featured in The Guardian, paid for and produced to a brief agreed with Simply Business, the UK’s biggest business and landlord insurance provider, and sponsor of the supporting business growth hub.
This is a reproduction of an article which first appeared on The Guardian Small Business Network, on 23rd February 2016.
The original article can be found at: http://www.theguardian.com/simply-business-partner-zone/2016/feb/19/entrepreneurs-biggest-challenges-how-overcame-small-business-advice
Featured image: Running a small business can sometimes feel like balancing on the precipice of a mountain. Photograph: Alamy
