Aspired to be the next successful young entrepreneur? Are you prepared for the entrepreneur life you want to? In today’s intensely competitive business situation, starting a business can be nerve-racking and wildly-fulfilling, in my opinion.
Having been downs and ups myself for nearly two decades, venturing into business could be quite complicated and madly-challenging in countless ways you had not imagined. Some predictably common problems in regards to financial, pricing, branding, marketing, R&D, people etc. are needless to say. So, recognizing the potential challenges you may encounter in your business venture can help avoiding the possible drawbacks.
Here I shared six precarious journeys I have personally encountered and observed during my decade-long rollercoaster-like entrepreneurial expedition and regional small-and-medium enterprises (SME) business consulting experience for you to be aware of.
Journey #1: Company Level: Managing Money
Many startups and SMEs fail due to insufficiency of capital required, worse still the weakening cash flow due to overspending. Ask yourself: “Are you spending on something preventable such as leasing fancy office, buying expensive furniture and computers, over-staffing, excess inventory etc.?” If you are doing this, it is a signal that you are not on top of your game.
Journey #2: Company Level: Pricing
A common problem for startups and SMEs in Malaysia and other Asian regions is to reduce selling price in order to attract purchase without rightly understanding their margins and other cost impact ensuing from variable and opportunity costs. I observed, a good pricing approach takes into account of input costs, market segments, trade margins, profit margins, market conditions and exchange rates. If you are not doing this, for instance, you are likely to selling low-end products in a high-end market.
Journey #3: Company Level: Marketing and Advertising
Another common problem for startups and SMEs is to rush into media advertisements without knowing precisely the customer demographic profile, geographic segmentation and other marketing related data. Ask yourself: “Have you selected the right media channel to reach the right target customers at the right time?” The cost of marketing and advertising can be expensive, for instance, if you are not choosing the right path, you may waste money on print ads that may contain incorrect message and be placed in a publication that does not reach your target customers.
Journey #4: Company Level: Managing People
There is an old adage goes: “You are only as good as the people around you.” This is certain magnifying particularly for startup companies due to limited resources and fierce competition. Ask yourself: “As a CEO, are you always the best person to make good decision?” This is something that I have learned personally – as an entrepreneur in my own startups, as a business consultant for many startups/SMEs, and as a manager for numerous large corporations; it is well worth the effort to have fewer smarter people and partners around you. Great talent is a crucial component in the success of your entrepreneurial journey.
Journey #5: Personal Level: Managing Work & Family
Generally speaking, achieving work-life balance is a pretty reasonable advice for most professionals, however, such advice does not apply to entrepreneurs. I personally believe that entrepreneurs are way different. As entrepreneurs, we are all in all-the-time working, no matter if it is day or night, Monday or Sunday. I have personally encountered this – skipping meals, sports, hobbies and social gatherings, in order prevent anything that possibly diverts my attention and passion into reality. Do not get me wrong, entrepreneurs should not give up important facets of their lives such as family.
Journey #6: Personal Level: Being Alone
Ask yourself: “Do you feel alone as an entrepreneur?” If you are a startup entrepreneur, you can often feel alone as you frequently find yourself just working with other people, be it your clients, associates, business partners, other business people. What is more, you can often find nuisance from people around you like shareholders, investors, parents and even your spouse – they can affect your work, momentums and plans. So, surround yourself with positive people and mentors. Look, studies revealed that mentors are secret weapons to many successful startups.