15 Important Points Outlining the Hardest Parts of Owning a Business
Many things are hard about starting and owning your own business. To answer the question of what is the hardest part of starting and running a business? Let’s think of it in the following way.
Suppose you had a contest for business owners to run a retail shoe store. All the circumstances are identical. The only variation is each business owner. Now the hardest part of running the store will depend on the skills and personality of the business owner. What may be hard for one may come naturally for the other.
For example, getting people to come into the store may be difficult for one person. In contrast, for another, it comes naturally. Another example may be managing your staff. Some business owners have great people skills while others have a lot of difficulties.
So, can we agree that some, not all, of the hardest parts of owning your business will depend on you? If you agree, then let’s look at some of the popular issues people find the hardest.
1. Getting a Business Loan:
Starting a new business involves a lot of risks. Many businesses fail in the first year of operation, and financial institutions know the facts and statistics. Unless you have a good business idea backed by a solid business plan and collateral, you may have a hard time getting a loan to fund your business. Banks don’t like risk; they lend money when they are sure their money is safe, and you have the means to pay back the loan whether you succeed or not.
If you don’t have enough collateral or a co-signer, you may have to look elsewhere for a loan. It may result in a high-risk, high-interest loan, which takes away from your profit margin.
Without enough funding, you can’t start your business, and getting a loan can be difficult.
2. Running Out of Money:
It’s difficult to get funding when starting a business, as mentioned in the point above. Suppose you are approved for a loan, and you have just enough to get started. If you run out of operating money, it will be difficult to get extra funding from your original lender. You may need to look elsewhere to get a loan, such as a high-interest loan that will affect your bottom line, or you may need to close your doors.
You need to watch your spending and ensure you have an emergency fund set up. Getting a loan when you’re desperate is a bad situation you want to avoid.
3. Supporting Yourself When Starting Your Company:
Starting a new business can be a stressful time. You’ll have hundreds of issues to deal with, and it’s easy to get overwhelmed. In addition to all the stress you’re under to make things work and open on time, you have to worry about supporting yourself.
Not only is you’re business using a lot of startup cash, but you are working full time, and you are not receiving a paycheck like you would if you were an employee. Figuring out how to support yourself and run your business can be tricky and stressful.
You have to be able to support yourself. For example, having 3-6 months of living expenses on the side will give you some time for your business to start making money.
4. Hiring the Right People:
Finding the right people to employ can be difficult. If you hire the wrong person, you end up with a headache. You will spend time training them. You will be paying them along with the trainer that has to take time out of their schedule to train.
Your training process could be a couple of weeks or months until your new employee can take on the job duties.
When you hire the wrong person, you have wasted time training, and now you need to start over with the hiring process and training.
If your training is one month, you have lost productivity of two months out of the year. The first employee took a month and didn’t work out. The new employee required one month. So you can see it’s important to hire the right employee the first time. For more see, How and When to Hire a New Employee.
5. Managing Your Staff:
Managing your staff is not the easiest thing to do, sometimes it’s easier to do it yourself. When you’re fortunate enough to hire a skilled and dedicated team, management becomes fairly simple. Your employees already know what to do, they know your expectations, and they get things done.
Unfortunately, suppose you’re in a business that has a high turnover rate. In that case, you’re constantly hiring new employees and training. You get frustrated because you’re dealing with new people all the time. When you have new people working for you, they are not as dedicated and skilled as your seasoned staff.
You may have to deal with problem employees. Sometimes you do your best to give them the benefit of the doubt, and you give them many chances to improve. Sometimes it’s better just to let them go, especially when there is no improvement.
6. Keeping Up With Change:
The business world is in constant change and seems to be moving faster and faster every year. Technology has a lot to do with it because technology moves quickly; there are new innovations and better and faster ways of doing things.
When there’s a better way of doing something. There is a change in process, whether it’s new software, new hardware, or a totally new method.
Keeping up with change can be challenging. If you don’t, you could be left behind, and your competition can have an edge on you. You have to keep up with your industry and adapt to change.
7. Dealing With New Competition:
Things may be going great. You have a healthy market, and a strong customer base, and your profit margins are good. Life is good, and you feel good about the stability of your company. A new competitor shows up in the marketplace out of nowhere, and suddenly you have a problem. You have to ensure they’re not taking your customers and hurting your operation. It looks like the good times are over, and now you have to fight to keep your doors open. This happens a lot in healthy markets, competition will start to show up, and you have to deal with it.
A competitor may come into the marketplace with better prices, a better way of doing things, or a better product, and you’ll have to make changes to keep your spot in the marketplace.
When a new competitor shows up, don’t take it lightly. If you ignore them, you may end up losing a lot of business to the competition. When there’s new competition, you have to look at it as a fight for customers. You already have an advantage because you’re in the marketplace. You have customers and a piece of the market. Make sure you “up your game” and keep your market share.
8. Keeping Costs Down:
Keeping your costs down can be challenging. Especially in the early stages of starting a business, you’ll find your costs are very high, and that’s mostly because of unanticipated events.
When starting a new business, there are many things that you don’t anticipate until you reach that point. For example, you have a web design business, and you didn’t anticipate the need for buying royalty-free photos. You’ll need a subscription, and that’s an extra $100 per month or $1,200 per year, which was not in the budget. That’s just one issue.
There will be a few instances where you need to spend money when it wasn’t in the budget. It’s not really a mistake because you’re not experienced in this business to set everything up from the start.
Another point to consider is that when your business grows, so does your expense. The higher the demand, the more you’ll need to spend on operating costs. Sometimes it gets out of hand when you grow quickly. You start to hire for all the positions you need, and do not realize an entry-level position can cost you around $30,000 per year. If you multiply that by 10 employees, that expense becomes an eye-opener.
Keeping an eye on your costs is a good business practice that you’ll want to turn into a habit!
9. Marketing and Advertising:
Marketing is one of those areas that require skill and talent. Can you take out an ad in the newspaper and expect results? You sure can, and many business owners do this on their own. Let’s look at it from another point of view. You can market your own business. You may have some success; you may not. If you find the right marketing agency to communicate the right message to the right people, you could see exponential growth.
Marketing is a science. It’s an understanding of human behavior, and it takes years of experience to become good at it. As a business owner, you may not have the talent or the desire to market your own products and services. You can create your own in-house marketing department. Another option is outsourcing your marketing to an agency that understands your business and effectively takes care of your marketing.
10. Online Marketing:
Online marketing is another difficult area. There are so many ways to advertise online that it becomes overwhelming.
There are pay-per-click ads through search engines like Google and Bing. You have social media advertising through Facebook, X, and LinkedIn. You also have banner advertising, displaying your banner ad on thousands of websites. Then you have search engine optimization, which is a science in itself. Not to leave out influencer marketing.
Dabbling in online marketing can cost you thousands of dollars without results. It’s difficult to get the results you’re looking for without the help of a professional.
11. Being Understaffed When You Are Underfunded:
When you’re understaffed and can’t afford to hire, you can quickly become overwhelmed. You can no longer service your customers effectively and usually end up trying to do everything yourself.
You could end up working seven days a week and long hours to keep up with the workload. Not only do you have to provide customer service, but you also have to manage your business and keep up with the day-to-day tasks.
12. Living a Balanced Life:
Living a balanced life is not the easiest thing to do when you own and operate your own business. When you’re an employee, you punch in, do your work, punch out and go home. You have the rest of the day to do whatever you want. You don’t focus on your work. You leave your work behind.
As a business owner, it’s difficult to leave your work behind. You’re always thinking about your business, and finding that balance is hard.
Some people must keep an eye on their business, after-hours others choose to. From my experience, most of the people I know who own and operate their own business are thinking and working much more than eight hours a day. Their business activities are active during the day and after hours.
12. Finding Great Suppliers:
Many times it’s difficult to find a great supplier. When you first start out, suppliers may want your business as a new client. Still, they don’t know if you’ll be successful.
Even though it’s beneficial for a supplier to gain new customers, you won’t get the dedication and service as an established client would. For example, you may not get the pricing or priority for limited products.
Once you’re established and build a relationship with your supplier, you’ll get discounts and possibly a line of credit. During shortages of any product, you may also get priority over other customers.
Suppliers are just as important as customers. With the right suppliers, you can provide excellent products and services for your customers. Without a good supplier, it will be difficult to stock your shelves or provide quality for your customers.
13. Fine-Tuning Products and Services When Starting:
In the early stages, it’s difficult to fine-tune your products and services. To tailor your products and services to your customers, you need data. When you’re starting off, it’s hard because you don’t have enough sales or customers to compile data for an accurate analysis.
For example, creating a simple survey can get you the results you’re looking for. If you don’t have enough customers to come through the door, you can’t get people to take your survey. You don’t want to make decisions based on a small sample of feedback. You want a source of data you can depend on.
When you have solid data, you can make informed decisions. Making too many changes without data can make you go around in circles without any solid results. You need enough feedback to make effective changes.
14. Growing to Quickly:
One thing a lot of business owners don’t consider is growing too quickly. When your business grows too quickly, many problems can occur, and it can be damaging to your business and your reputation.
When you’re demand increases, you’ll have trouble keeping up with supply. You won’t have the staff to service your customers, and you’ll find yourself struggling each and every day. One thing you don’t want is more growth than you can handle. What you want is a stable increase that will allow you to prepare for the added demand.
15. Waiting for Results Is Difficult:
Waiting for the results you want is difficult, especially if you’re a highly motivated individual. You want those sales coming in and profits adding up so you can expand and grow your business.
Unfortunately, while you control your business, you often don’t have control over sales and revenue. You can influence them, but you can only boost your sales so much, and when you’re ready to go and have to wait, it can be difficult.
Waiting is not only for sales, but it’s also other areas. For example, you have a website designer, and the website takes two months to be up and running. Many business owners are go-getters, and they want their results quickly. When you have full control, then you can deliver the results when you need them, but with limited control, you’ll have to learn to wait.
Conclusion:
Well, there you have it, some of the popular issues business owners find challenging. You now have a glimpse of what might show up. You have a better chance of overcoming the difficulties because you have considered them ahead of time.