There are many great reasons to start a small business. Working for yourself, earning more money, having a more flexible work schedule and expanding your skill set are all among them.
Despite all of the positives, building your own business has its difficulties. Sometimes these challenges seem bigger than they really are, and sometimes they keep us from fully pursuing an idea. As most small business owners will tell you, though, the risks and challenges are usually worth the rewards. It's worth finding solutions to these challenges and ways to handle the risks so you can realize your dream.
Consider these five big challenges to starting a business, and if you haven't already, start thinking about your personal contingency plan for overcoming them.
1. Running the show alone
Wearing all the hats of a business can be daunting. Just because you're an entrepreneur and starting a business doesn't necessarily mean you excel in all areas. You assume many roles as owner of a new business, including sales and marketing, accounting, IT, and innovation.
How to overcome this
Be honest with yourself about your strengths and weaknesses, and understand that your time is precious when you run a business. While you can certainly explore the idea of training to grow your abilities, you may be better off looking to others to help in the areas where you struggle – such as a virtual assistant or Best Buy's Geek Squad.
You can also hire a part-time independent contractor or even a local college student whose area of study melds with your business needs. For example, if your marketing skills aren't the sharpest or you just need to offload some marketing tasks in the interest of saving time, bringing on a marketing student to work for your business on a part-time basis may be a solution to your problems (at least in the early stages of your business).
Another resource worth exploring is the U.S. Small Business Administration's Office of Small Business Development Centers. This program provides one-stop assistance to current and prospective small business owners, with experts in local offices throughout the U.S. sharing information on handling many aspects of business.
2. Finding funding
One of the biggest challenges you face upon starting a business is figuring out how to fund the endeavor. Not every business requires a large investment from the get-go, but you do want to be sure you're in a position to keep the business running for the long term.
How to overcome this
When you're starting a business from scratch, you can seek funding in the form of small business loans or lines of credit, fund it yourself through personal savings, or try to raise capital. Speak with a mentor at SCORE to get their thoughts on the best course of action for your business based on your goals.
The SBA has small business loan programs and guarantees loans for entrepreneurs who want to start a business or expand one they already operate. Another option is a microloan – which is typically for less than $50,000. Since it's for a smaller amount than a typical bank loan, a microloan is easier to qualify for and provides borrowing opportunities that may not otherwise be available to you. It can be used for a startup project, to get a business off the ground, as working capital, or to fund equipment purchases, office leases, or new hires. [Looking for a business loan from an alternative lender? Check out our recommendations on the lenders we think are best for various needs and types of businesses.]
Different microlenders have different rules about how you can use the proceeds from their microloan, as well as different requirements to qualify for funding (such as a minimum credit score). The SBA has a microloan program; contact your local SBA office to find out more.
Just as importantly, you need to start rehearsing your business pitch. Whether you sell your ideas to an investor, a bank or another lender, decision-makers will want to understand your vision for success. The better you articulate this vision, the more likely you'll get the funding you need.
Editor's note: Looking for the right loan for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.
3. Getting health insurance
Once you take the step into business ownership, you're likely left without health insurance to cover yourself in case you get injured or ill. It's a small price to pay for the rewards of running your own company, but if you're not one to take risks in all areas of your life, you'll be happy to know you have a few options.
How to overcome this
Look into independent health insurance from eHealth Insurance. Assuming you have a generally good bill of health, you should be able to secure individual health insurance for a relatively low rate. Another option is to apply for membership in the Freelancers Union or some other organization that allows you to get group-rate health benefits even though you're self-employed.
Alternatively, take a look at the Health Insurance Marketplace to find plans that suit your healthcare needs and budget. If you've missed the open enrollment period to apply for health insurance via the Affordable Care Act, you might opt for a short-term health insurance plan to cover your health expenses until enrollment reopens. Many insurers have begun offering self-insured employee healthcare plans. One big advantage of these plans is that you can customize them to fit your specific needs.
4. Getting – and staying – organized and on track
Many people who have recently started a business or are in the process of starting one find themselves moving from task to task, attempting to put out fires with one hand while completing everyday tasks with the other. As experienced business owners often observe, being off track and disorganized is not only bad for your mental and physical health – it takes a toll on your productivity.
How to overcome this
Start by writing down and defining your tasks and goals for each day. Tasks are things you do to keep your business running day to day – for example, sending and reading emails, invoicing, and holding meetings. Goals are the longer-term achievements that you need for your business's growth and success, such as sales, marketing and expansion plans.
Once you've identified your tasks, list them in order of priority, clustering related tasks together. Prioritizing helps you determine which tasks and goals you should tackle at the most productive time of your day. Organizing and clustering enables you to handle similar tasks in one fell swoop instead of doing them in dribs and drabs (which causes you to be far less productive than is possible).
If you're like many new entrepreneurs – especially those who operate their new business from home – a disorganized, cluttered office with a makeshift or nonexistent filing system may be interfering with your productivity. Hiring a certified professional organizer could be a solution. Professional organizers, many of whom specialize in business clients, provide a wide range of services, such as creating physical or electronic filing and storage systems, coaching clients in time management, and installing workflow organization tools. [You can also check out our recommendations for the best document management software to store and organize your files.]
5. Maintaining work-life balance
Any seasoned entrepreneur can tell you about the difficulties of maintaining work-life balance. If you're just starting and working out of your home, it's easy to find yourself on the computer from 7 a.m. to dinner, only to spend another few hours at night crossing a few more things off of your list. What's more, you may suddenly find yourself manic about work and business-related tasks, neglecting your responsibilities in other areas of your life. Exercise, time with friends and family, and sleep are often taken for granted.
How to overcome this
As difficult as it might be, it is crucial to establish an unshakable routine that sets clear boundaries between work and free or family time. Everyone manages their days differently, but if putting "run 3 miles at lunchtime" on your calendar makes you stick to the commitment, do it.
If you cross everything off your to-do list by 8 p.m., don't start diving into tomorrow's tasks. Spend that extra time with family, or consider going to bed early. Your body and mind will thank you.
Julie Ritzer Ross contributed to the writing in this article.