Are you an entrepreneur? If you are, then I believe you will familiar with the pattern or business challenges faced when starting and building a business from scratch. If you are not an entrepreneur but you dream of becoming one someday, then I think you will find this article worthwhile.
Why am I writing on such a topic? I decided to write on the “10 business challenges every entrepreneur must face when building a business from scratch” to give entrepreneurs a glimpse of what to expect when they set out to start a new business venture. I am not writing to show my writing skills. Moreover, I am not a professional writer; I am an entrepreneur and investor to the core. I simply write to share my knowledge on building a business with anyone who is willing to learn.
This article is not meant to discourage or scare you from going into business. Instead, I wrote this article to prepare and highlight you on the business challenges to expect and how to handle them. Just as the popular saying goes:
“He that is prepared has half won the battle.”
Below are 10 Business Challenges Every Entrepreneur Must Face When Building a Business from Scratch:
1. Developing the Vision and Idea:
This is usually the first challenge faced by every entrepreneur. Finding the right business opportunity or creatively developing an idea is certainly not an easy task. I call “Envisioning the idea” the first true task of an entrepreneur. As an entrepreneur, you must develop the ability to see what others cannot see. While others see problems, you must see opportunities.
But seeing opportunities is just the first task. The main challenge is going to be your ability to forge that opportunity into a business idea. I see this as a business challenge because the process of transforming opportunities into business plans is like trying to turn lead into gold. I call it the process of “Creating Value out Of Nothing.” If you are not an entrepreneur, you might not be familiar with the process. The process of:
- Identifying a problem
- Seeing an opportunity in the problem
- Coming up with a solution
- Developing your opportunity into a business idea
- Integrating your solution into the business plan
Another way “developing the vision and idea” will be a business challenge is that an entrepreneur must sometimes assume the role of a sorcerer. Let me explain in detail. While others dwell in the past and present, an entrepreneur must envision and forecast the future. An entrepreneur must always be ahead of his time or else he might lose his relevance. He must have the ability to bring into present what is yet to be. Let me give you some practical illustrations:
In the late 70s and early 80s, while IBM saw increase in demand for their mainframe computers, Steve Jobs envisioned a personal computer in every home and Bill Gates envisioned the need for easy to use software for personal computers.
While everyone saw humans flying as an impossibility, the Wright brothers envisioned a flying machine.
Back in those days when cars were custom made and exclusively for the rich, Henry Ford envisioned affordable cars for the masses.
I believe with these few examples, my point is clear. Developing the vision and idea is the first true task of an entrepreneur.
2. Raising Capital:
After developing your idea, the next challenge you are going to face is the challenge of raising capital. As an entrepreneur, you are the only one who knows the idea to the core. You are the only one who knows the story of the future. Trying to convince investors about something that doesn’t exist is definitely a challenge.
There is more to raising capital than just simply asking for money. Most investors want to invest in already established businesses with minimal risk. When building a business from scratch, raising capital will definitely be a business challenge you must face.
To overcome this challenge, you must develop the ability to sell your idea and vision to potential investors. When I say “sell your ideas”, I mean improving your communication skill and your manner of presentation. In the game of raising capital, you must have a good story backed by a strong business plan. If you are interested in learning how to successfully raise capital, you can check other articles I have written.
3. Assembling a Team:
The third challenge you must face in the course of developing a business is assembling the right team. When I talk about a team, I am not talking about regular employees. I am talking about a “round table strategic business team” that will meet regularly to brainstorm on ways to grow your business.
As an entrepreneur, you are bound to have strengths and weaknesses. That is the more reason you need to assemble a strong team that will cover up for your weaknesses. A team is a necessity in your quest to build a business. Now finding a business team is just the first hurdle, transferring your passion and vision to your team is the real piece of cake.
You must strive to make sure your team sees the future you see. They must believe in your possibilities and must also be passionate about making that possibility a reality. If they can’t grasp your vision, if they can’t see they future with you, then they are not worthy being your team.
Your strategic business team should comprise your banker, financial advisor, accountant, attorney or legal adviser and any other specialist that will be of tremendous impact to your business. A question on your mind might be “how am I going to pay this team? My answer is I don’t know. You will have to figure it out yourself or better still, you can consider bringing them on board as partners.
Continue reading this entry »