Entrepreneurship remains the foundation for the growth and development of small medium enterprises, SMEs; engines of growth of the economy of Ghana. Being an entrepreneur in the current generation comes with a lot of hurdles – perhaps why some business start-ups fail.
For entrepreneurs in today’s business world to stay afloat in the initial days of starting their business, they have to constantly devise innovative ways to solve the numerous problems as highlighted below.
Capital is highly essential to the growth of any business. Most emerging entrepreneurs struggle with funding – hence need to seek out innovative ways to source finance. Given the poor government financial support systems in the country (high cost of sourcing loans), most entrepreneurs will usually fall back on traditional funding sources such as loans from parents, siblings, friends and relations as well as close business associates. While seeking funding, entrepreneurs must ensure that they are not giving up too much of their business to get it.
Cash flow management
When starting a new business, entrepreneurs are usually faced with the problem of cash flow management. While their businesses might not yet be yielding a lot of profit, they still have to pay bills while waiting for pending checks to arrive. At the initial stage of starting a business, most entrepreneurs struggle a lot with managing cash flow, hence incur very huge debts. The weak financial intervention systems in the country further constrains the entrepreneur from achieving the cash flow management function, and this poses a great risk to any new business start-up. However, with proper budgeting and planning, the risks from cash flow management becomes very minimal.
The process of hiring new employees is a also a major challenge for emerging entrepreneurs. Entrepreneurs have to spend a significant amount of time and money in their quest to hire the best talents for their business. The process of hiring candidates can take several days, weeks or in extreme cases years: reviewing resumes, sitting through so many qualified candidates to sieve out the most resourceful and skilful candidate. Even after hiring, entrepreneurs must make provision for an attractive package to keep the talents motivated. Entrepreneurs can ease this challenge by being exclusive. Their adverts for candidates must be ultra-specific in specifying what it takes to be hired at the company. This way, expectations are clear for both parties from the unset.
Entrepreneurs are by nature delegators. There is always the problem of project outsourcing. Emerging entrepreneurs are by lack of experience, bad at delegating or outsourcing projects. Even when they do delegate, they usually negotiate badly thus resulting in a very low earning potential. Making a detailed plan of projects to be outsourced as well as the expected outcomes can help entrepreneurs outsource better.
This is perhaps the biggest problem faced by entrepreneurs. Entrepreneurs must divide their time and attention to the different sectors of their business, and this sometimes poses a challenge to emerging entrepreneurs. Entrepreneurs must be smart about how they spend their time. This challenge can be managed by creating well-set out goal lists. All tasks that do not mesh with the goal list must be eliminated.
Entrepreneurs just starting out usually do not know the best way to market their products and services. This reduces their initial return on investment. In tackling this problem, entrepreneurs must either adopt proven best practices in marketing, or outsource their marketing strategy to someone who is good at it.
An entrepreneur’s workflow is not enviable in the early business stages. It is quite easy for entrepreneurs to get discouraged when something goes wrong or moves in a very slow pace. To kill self-doubt, entrepreneurs have to constantly seek new ways to keep themselves motivated.
While entrepreneurs seem to face many challenges especially in the early stages of launching their business, they can use business intelligence and perseverance to conquer.
Now it's your turn!
What do you think? What's the best way to stay afloat as a young entrepreneur just starting out. Let's have a chat in the comments!