Top 3 Hidden Challenges Entrepreneurs Face When Starting Their Own Business
For small business, the road to success is not easy. There are major hurdles the small business community must be conscious of from changing tax laws and rising tariffs, to the impact of machine learning and automation. This does not even account for all of the hidden challenges that come as a result of starting one’s own business. Those challenges are more nuanced but can be equally as impactful on a business’s success as they strive to develop their personal brand and client base..
Findings from our Small Business Expo: Bi-Annual Trends Report, which highlighted the state of small business in America, also revealed hidden challenges entrepreneurs and business owners face as they embrace the changing marketplace and current economic climate. Our survey culled responses from over 400 U.S.-based small business owners across several industries including consulting, retail and e-commerce, construction and marketing/advertising to name a few. Below are three of the biggest challenges they identified.
One of the first challenges entrepreneurs face is the support and regulation they receive from the broader administration. Out of the 400 respondents polled, barely 40 percent of respondents felt small businesses were fully supported by the US administration. Meanwhile, 51 percent of respondents felt there was too much government regulation of small business.
There are several reasons why respondents might feel this way. Government rulings can change at the drop of a hat and are not always created with the small business owner in mind. Regulations that work for larger companies with bigger resources on hand to handle change might not be so easy for smaller, less-staffed companies to address on short notice. Business owners must be tapped into the current political climate and conversation so as to ensure their business is up to date on the latest regulations and laws potentially threatening or changing the way in which they operate.
Not diversifying your client base is another hidden challenge some business owners forget to take into account. Having your eggs in “one client basket,” so to speak, can be dangerous should that industry or client suddenly experience a wave of layoffs. This does not take into an account how this can limit the business’s exposure as well.
Relying too much on one client is another threat business owners might not take into consideration in the short-term. What seems like a great and loyal client today can change tomorrow. If that client is responsible for more than half of a business’ income, there’s a big risk of losing everything should they suddenly have a change of heart or experience financial problems. This also applies to new business owners who rely too much on one medium to sell their product.
Look at the retail industry for example: we are currently in the middle of what is being presented as a “retail apocalypse” and businesses risk failing just because they do not have an online presence or an accessible online store. Small businesses know this too, with 41 percent of survey respondents agreeing that the U.S. is currently experiencing a brick and mortar “retail apocalypse”. This puts pressure on businesses to immediately expand into the online sphere which could, in turn, make it harder for businesses to find their footing within their industry. Other industries should heed retail’s warning as consumers continue to gravitate towards digital interactions.
Another hidden challenge aspiring entrepreneurs face is the constant need for innovation. Today’s average consumer is not concerned with a business owner’s journey; rather, consumers care about what business owners can provide that is unique and how it differs from Company X. Small business owners are experiencing higher expectations from consumers than ever before in how they’re delivering experiences and products. The expectation that we’re going to provide an innovative and therefore better, faster, and more efficient experience than our competitor is a big pressure.
Without proper resources and access to new technologies, small business owners and entrepreneurs are limited in the experiences they can provide. When asked to pinpoint which factors play a role in the success of their business, an overwhelming 60 percent of respondents agreed that “resources you have available to you” topped the list. It’s clear business support combined with resources can make a significant difference for emerging businesses.
No one starts a business because they believe it will be easy. Despite these challenges, small business owners continue to take risks. In fact, 69 percent of respondents stated they feel optimistic about the economic future of their business in the next 12 months. One impassioned business owner said, “As always for those that look, there are many opportunities. No matter what happens with the economy we see a lot of exciting changes in the world. I have no doubt that there will be a lot of new businesses in the next few years that are really going to unseat the kings in various industries.” While small business owners are on a hard road to success with hidden and not-so-hidden challenges at every corner, these challenges can bring unexpected opportunities for businesses to stand out and make an impact on their industry and community.
Zachary W. Lezberg, a New York City-based producer and entrepreneur who currently owns and operates theater, film, and live event production company The Show Producers, has long been passionate about developing unforgettable productions. His 15 years of industry experience began in 2000, when, as a freshman at the University of Miami, Lezberg launched Quantum Entertainment. A student-run film and theater production organization, Quantum Entertainment provides individuals with the coveted opportunity to gain firsthand experience in all aspects of theatrical, film and live event production.
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