Why Starting A Business Is Hard

Coming up with a billion-dollar idea is hard enough, but starting a business goes beyond its initial concept. Unfortunately, there are several roadblocks in the way of success. The good news is if you plan it right, it doesn’t have to be so hard.

Starting a business is hard because you need to develop a thorough business plan, research everything from accounting to permits, and figure out a way to reach your target market. However, if you make a detailed plan and are willing to put in the time, you can make it easier.

This article will explore the most common roadblocks new businesses face, along with the steps required to get started and be successful.

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Roadblocks When Starting a Business

Some of the main reasons that starting a business can seem hard are:

Underestimating the budget needed and running out of money
Being too stuck on one idea and not willing to compromise
The market is already saturated with similar products or services
Not doing enough research beforehand and missing out on opportunities

There are other issues you may face, and they can pop up at any time during the process. To be prosperous, you will need to be willing to do plenty of research and know when to ask for help.

Budgeting

Brutal honesty is the key to budgeting. Ask yourself:

How much money do you have?
How much money do you need?

Having a clear understanding of your own financials is going to be vital to your success. In order to purchase supplies, permits, advertising, and potential locations, you need to have an exact number from which you can draw.

When you know how much money you have, you will know whether or not you can begin alone or whether you will need to borrow.

Knowing how much money you need will be more challenging to determine. You can’t know all of the costs involved, but you can estimate. Through research, you can check a few different insurance companies to find the best price. Similarly, you can look into multiple locations for possible stores and decide when you have a more concrete idea of your budget.

Something things to keep in mind include:

One-time purchases: These will be made at the beginning of the process and are necessary to the business, but won’t be recurring, such as a coffee machine for a cafe.
Essential purchases: Products or services essential to your start-up, such as camera equipment for a photographer.
Fixed costs: Generally month-to-month expenses that will be consistent, such as internet connection.

The budget should be the first thing you draw up. Having an idea is one thing, but bringing it to life will mean spending money. Without it, you won’t get too far.

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Compromising

No matter how good you think your idea is, chances are, it will look very different after doing a little research. You might find that your concept too closely resembles another company or that what you’re looking to offer needs something extra to draw people in.

For example, if you had an idea for a dog walking business, chances are there are others in the area. You might find that you need to offer a waste removal aspect to gain people’s interest. Another example would be a new cafe, not offering vegan products. By not considering this demographic, you could lose out on vital revenue.

Market Saturation

Having a unique idea is often unheard of. Chances are, somebody is doing something similar somewhere. Unfortunately, market saturation can cause a decrease in demand, making it very difficult for new companies.

To succeed in a saturated market, you will need to:

Create something new and improved
Offer a lower price point
Add additional products or services

Though difficult, it is not impossible. Work to make your idea as unique or innovative as possible. Offering something similar at a lower price is a great way to get customers’ attention, along with providing something extra with their purchase.

Research

There’s no getting around it; you will need to spend a significant amount of time researching everything from products and services to your competition and their pricing, along with legal aspects, financing, and branding.

This is a commonplace where people hit a roadblock in the process. Research can be difficult if you don’t know what you’re looking for. A good rule to follow is to research everything.

Check out your competition and what they offer
Look at local stores to see what’s popular and what doesn’t seem to have a market
Look into local demographics to see if they have the capital to buy what you’re selling
Check online for comparable products and services and compare yours, being brutally honest about the quality
Speak with family and friends to get their opinions
Consider wholesale cut your costs down
Join social media groups and take note of shared grievances and pain points
Look into online advertising as well as in local papers and stores

The more information you can gather before starting, the bigger head start you will have.

How to Start a Business

In many cases, people will start their own business based on a job they already know how to do. In other situations, it could be an idea born from a problem that you can’t seem to solve. Some other reasons people choose to start their own business include:

Wanting flexibility at work
Be your own boss
Pursue something you’re passionate about
Make more money
Be more independent
Seeking a challenge
Learn new skills
Work from home

Regardless of your reasoning, getting started can be tricky. Knowing where to begin and what needs to be done can be a daunting task. Depending on the kind of business you are looking to start, there may be a need for licensing or permits, finding store locations, or investing in machinery.

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With that said, most businesses will require many of the same steps to be taken before they can be active.

Create a Business Plan

Once you have a solid idea, it’s a great idea to write it down in detail. You should lay out all the information you have, along with any research or additional ideas. Start a to-do list and create a plan of action, including all of the things you will need in order to be successful. These lists will likely get bigger as you get further into the process, but it’s essential to have somewhere to go from.

Some benefits of working through a business plan include:

A better understanding of the business as a whole.
Help in assessing the potential for success and see any areas that could be problematic.
Prove how serious you are to both yourself and potential investors.
Give you an idea of who your target customer base is.
Provide vital research opportunities
A deeper understanding of the market and competition

This business plan will eventually be polished and become a document by which your future company operates. Initially, it can act as a catalyst in research and development.

Research the Market

If you have come up with your idea because you have a problem that you can’t seem to fix, then chances are, other people are having the same trouble. For example, if you search for local dog-walking services and find that none are available in your home area, there should be a market for other dog owners looking for the same service.

Whatever the endeavor, start by looking into your area for similar businesses. You may find that there are already some current businesses in place. Likewise, if your business is an online option, there is presumably already something similar.

Finding active businesses with a comparable model doesn’t have to be a roadblock, however. If you feel you can offer a better service or have something that sets you apart, you should still go forward. Just understand that it may take a little longer to find your place in the market.

Business Overview

Unlike the business plan, which is an overview of your goals and business ideas, a business overview is a detailed plan of what you will be offering, along with how you plan to achieve your goals.

Within the overview, you should include detailed descriptions of what you intend to sell or offer. If you are looking to manufacture a product, state as much, along with how you intend to produce, package and ship it. If you are looking at an online service, give details on what you will be providing and who may require it.

Market Research

Market research will include not only competitors, similar products or services, and location-specific information, but it should also have your target market. This is the time to look at who might be willing to purchase what you’re selling and how you can better reach them.

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For example, if looking to sell a web hosting platform, you should aim your research online. Visit blogs and equivalent platforms for information on what is already available and for how much. On the other hand, if looking to sell dog sweaters, visiting pet stores is a great place to get an idea of the quality and cost.

Additionally, you should be able to narrow down your target audience to a quite specific group of people. For example, although plenty of people are pet owners, it is widely agreed that Millenials and Boomers have more extra income to spend on their pets than Gen Z.

Costs or Budget

Budgeting is one of the most significant issues you can face when starting a new business. In many cases, it is so easy to underestimate the costs involved. By making a detailed list of all the potential costs, you can often streamline things and find ways to save.

Some costs will be mandatory, such as:

A business license
Insurance, including personal liability or renters
Supplies, including machinery or stable WiFi

Other typical costs that can be variable will include:

Renting a storefront
Designing and creating a website
Advertising
Staff
Personal transportation

Having a clear idea of the required costs will help you to understand whether or not you will need to take out a loan to start the business or whether you have the capital yourself.

Permits and Insurance

The first active step you will need to take before you can open your business is to register as a legal business. For this, you can use the company name or your own in most cases. However, before choosing a company name, be sure to check that you can obtain the appropriate domain using a domain checker tool.

Permits will depend upon your state and county. You will need to check your local laws to see what, if anything, you may need to apply for.

However, insurance is a must-have. Be it a personal liability insurance to cover yourself should you be offering in-home services or renters insurance on a storefront. You could save thousands down the line should something go wrong.

Open a Bank Account

You will need a bank account to:

Register for taxes
Pay invoices to vendors
Receive payments from clients

Looking into using a payment processor, such as Stripe, will give you the ability to receive online payments and in-person payments. They take a small percentage but offer worldwide secure payments, along with a physical terminal through which you can have clients pay in person.

Finalize a Pricing Model

By this point, you should have a clear idea of precisely what you are offering and how much you will be charging. Ideally, keeping things simple is a good idea at first. You will be able to provide more once you are established and have a solid client base.

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Pricing will depend upon a few things:

Competitor prices
The complexity of the product or service
Manufacturing costs
Overhead

A standard formula to calculate the retail price of a product is:

[The cost of the item ÷ (100 – the markup percentage)] x 100 = Retail price

Using this, an item that cost $12, with a markup percentage of 50% would cost:

[$12 ÷ (100 – 50%)] x 100 = $24 retail price

Design and Create a Website

Even if you’re not offering an online service, having a website is essential in today’s market. It gives your customers access to information, such as pricing, products, and opening times, along with a way to contact you.

For new businesses, using online templates from companies such as Wix can save time and money. They are sleek, professional, and more than enough for a first-time website. Further down the line, you can look into something more serious, but these services are initially a great way to keep to a budget.

A key thing to remember is that more than half of your possible users will be browsing on their smartphones. When designing your website, ensure that it is mobile-optimized.

Create a Brand Identity

Creating a recognizable brand isn’t just for large corporations. Being remembered is vital to early businesses. It can help to make a cohesive unit, from advertising and sales to promoting loyalty amongst clients.

Although designers can be quite expensive, there are some cheaper options for the initial start-up. Etsy has several designers, such as We Are Creatives, who will take some information from you and create three to six different logo ideas for under $100.

Look for Clients

Finding customers is no easy feat. It can mean sending out email blasts, looking to family and friends for referrals, and even making in-person pitches.

For online software, putting up flyers in internet cafes or advertising in online forums would be a great way to get in front of probable customers. However, if you are starting a business selling dog sweaters, you may need to approach local pet stores to see if they would be willing to stock your products.

If you will be opening a store, offering discounts or holding an opening party would encourage people to try your products. Offering small gifts or incentives will help entice people to purchase and hopefully motivate them to come back.

The Power of Social Media

Not only are social media accounts free, but they also have the potential to put your company in front of thousands of new customers. With almost 2.7 billion monthly active users, their market is too big to ignore.

Facebook Ads

Not having a Facebook page will make your business seem out of touch and unprofessional. Customers like to have a direct link to companies, building trust and a relationship. It is also the best way to inform clients of new information.

To create a Facebook ad:

Create a business page, which is usually linked to your personal account.
Under the cover photo, you will see a “Promote” button.
Select a goal for the ad, such as “Get more likes.”
Use a previous post, or select a new photo and text.
Narrow your audience down by location, age, demographic, and interests.
Choose how much you want to spend per day and for how long.
Submit to be reviewed by Facebook, which should not take more than a day.

Even if you have an established following, using Facebook Ads can get your company in front of many more people.

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Be Active

Having social media is more than just posting and hoping for results. It is important to like, share, and comment on posts and your followers’ posts. You are looking to create a relationship of trust, and by engaging in discussions and commenting on posts, you are fostering that trust and bond.

Studies have shown that people are more likely to purchase from or do business with a Facebook page that is active and responsive.

Conclusion

In the beginning, it can seem like starting a business is hard, and the truth is, it won’t be easy. You will need to do hours of research, create a budget, register for various permits and insurance policies, and create an online presence that is both consistent and approachable.

It may seem overwhelming, and you may find that your original idea changes as you go on. But if you put in the work and follow a clearly laid out plan, you have a great chance of success.

Sources

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