“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.” – Henry Ford
Success rarely happens overnight. For those interested in starting a small business, the startup process can be both confusing and intimidating. However, knowing which obstacles to expect can equip you with the ability to bring a promising business idea to fruition.
Problem #1: Financing
Startup costs are not cut and dry. Once preliminary expenses have been outlined and estimated, many small business grapple with how to find funding. Funding can be out-of-pocket or sought from outside investors and institutions. If you are interested in pursuing your own small business idea, consider the following financing options:
- Business loans
- Venture capital funding
- Government grants
Depending on the specific needs and nature of the startup, some forms of financing may be more fitting than others.
Problem #2: Partnerships and Employee Management
If your idea is successful or you find yourself struggling to meet consumer demands, you may greatly benefit from finding a partner or employee with whom to share your business vision.
One pitfall that occurs in the early stages of small businesses is retaining partnerships and employees without the required business contracts and agreements. This can open the door to internal instability, such as disagreements between parties and discrepancies in financial documentation. If you find and employee or partner who is the right fit for your team, do not hesitate to legitimize your business agreement.
Problem #3: Standing Out Against Competition
New entrepreneurs may find themselves overwhelmed by the amount of businesses in their area offering a product or service similar to theirs. Rather than focusing on your limitations, it can be helpful to pay attention to any advantages you may have in the existing market.
Are there any untapped demographics in your area? What are specific, unique skills or products that you can offer? While it may take additional effort, innovation and critical thinking can set your product or service apart from others in your industry.
Problem #4: Complying with Taxes and Legal Obligations
If you have a business idea, structuring and registering your business may seem like a tall task. Business formation requires an understanding of state and federal requirements, in addition to a well-developed business plan. When it comes to tax preparation, business owners can agree that it is essential to have a tax plan in place sooner rather than later.
If you are unsure about the steps needed to incorporate your business and legitimize your operation, a tax or business professional can alleviate confusion and set you on the right path.
Problem #5: Choosing an Appropriate Business Location
Finding an appropriate business location is an avoidable, but challenging, aspect of business formation. Ideally, a business office or storefront is easily accessible by the company’s target demographic. If you are open to hiring additional staff in the future, the space should accommodate additional staff and allow room for growth.
Problem #6: Reaching Your Market
Whether a business chooses to use digital advertising, radio advertising, or community event participation to generate interest, failing to conduct research prior to marketing and advertising is a grave misstep. Variables like age, spending habits, and geographic location can all influence the effectiveness of methods used to attract potential clientele.
Problem #7: Staying Persistent
As an entrepreneur, it is important to come to terms with the possibility of slow business growth. It can be frustrating to put effort into a strategy that fails, but adaptability is key. Small business owners can benefit from seeking feedback from colleagues or employees when something does not go according to plan. Expressing a positive outlook will impact company morale and can even attract potential clients or customers.
When starting a business, it is crucial to prepare for bumps in the road and prevent future issues. If you would like business assistance from a licensed Maryland legal professional, we invite you to contact the Law Offices of Elsa W. Smith, LLC at 410-995-7719.