The business world tends to be one of the riskiest ventures one can indulge in. This report tries to give an insight of what to expect from the time of establishing the business. As prospective entrepreneurs, there is need to learn a lot concerning business management skills. Before one starts any business whether small or on a large scale, it is worth knowing what it takes to run one. It is always impossible that one could get an idea overnight and wake up the following morning to start a business. Various mechanisms have to be put in place to ensure the success of any business. The structure and management of the business are complicated and require a lot of discipline and dedication for a business to be termed as successful. (Small Business ,2013).
Business success is defined as the feeling of satisfaction and completion that business owners get when their business career is over. The success of a business takes in dimensions namely; personal commitment, long-term survival of the business, customer satisfaction and employee satisfaction. Incorporating all these dimensions is what will ensure a successful business. Most of the challenges that the business will face are likely to have solutions. This report investigates some of the challenges likely to be encountered and their possible mitigating measures (Small Business Trends,2015).What is a Small Scale Business?
A small business is one that is independently owned and operated and meets the employment and the sales standard developed by the agency (US Small Business Association). They have fewer employees, and their annual revenue is considerably small than corporations. Examples of small businesses include; grocery stores, restaurants, hairdressers, photographers, convenience stores among others.
The Theory of Small Scale Business
Most large businesses began from a single idea of small businesses. They withstood all the challenges, and their long-term survival resulted to huge businesses that control lots of resources. Many individuals bring into book their ideas of owning businesses; however, few of them end opening up a small business with glowing desire to establish an empire of business in the long term. As time advances, the challenges that the business faces continue to increase. By the end of ten years, 67 percent of initially established businesses have gone into extinction. This means that only 33 percent of small-scale businesses survive to become large-scale businesses.
Every business has a theory according to the Harvard Business Review (1994). This theory explains both the successes and failures of any business. This theory has been regarded as one of the most important steps towards achieving a business growth and advancement from small scale to medium or large scale. Starting business calls for lots of sacrifice and endurance. Be ready give in all the necessary resources to make the business grow(Small Business Trends,2015)..
Challenges Facing a Start-up Business
As mentioned early, starting up a new business is not just a walk in the park. No matter how experienced an entrepreneur is, challenges are quite unavoidable. Introducing a new brand of foreign product to the market and expect to overcome the stiff competition from the local market is not easy. Prospecting to earn fast rewards from such is even more difficult. The following are some of the key challenges to expect when establishing a business;
Abandoning Of Another Career
It is almost impossible to manage to nurture a business and at the same time concentrate on another career. During the preliminary stages, it may be possible to manage to keep the two, but as the business gains momentum, apparently it will become too difficult to manage both. It is not an easy decision to decide to quit the permanent job opportunity at the university only to chase some risky business venture whose future is quite unpredictable. It will be equally difficult to make such a decision.
Financing The Business
Starting a new business means starting from scratch. It may call for starting with some crazy networking to get funds to start the business. As up-coming entrepreneurs, personal savings are the finances that the business will depends on. Banks and insurances shy off from offering their services to up-coming businesses due to lack of security. This is likely to make it difficult to have a good start off especially if the available savings will not be enough.
Selection of a Team to Work With
Starting up business calls for team-work that comprises of an entrepreneur, workers and also suppliers of the business. Picking the right team can be stressful since it is difficult to find workers who could match with the cost and the culture of the business that is dealing with a foreign brand. A lot of time is spent decisions to have the right time, and if one is under pressure to select a team, he or she might make a wrong choice.
Dealing with Uncertainties
Upcoming entrepreneurs will ask questions such as; for how long will the business exist? How profitable will it be? Will the customers like the products being offered? Will the business provide a steady paycheck? None of these questions will have an answer when establishing a business. Dealing with such volatilities has proved to be one of the most difficult situations that a new entrepreneur should consider.
Being an entrepreneur, expect separation from the family since much time is likely to be spent in seeing the activities of the business and very little time will be available for the family. It is such a demanding undertaking. There may be feelings of loneliness due to unavailability of time to spend with the family and friends.
This is very challenging to most up-coming entrepreneurs. Hundreds of decisions have to be made in a day and one may get tired and stressed of decision-making. A single decision miscalculation can bring down the business. The business environment is dynamic, and competition is high, and hence the decision becomes an essential part while running the business(Tools for New Entrepreneurs, 2016).
Form of Business
The legal business to settle for is a partnership. Perhaps it can even be called Smart and Max Cafe. The business will be owned by two partners and each will have a share of ownership in the business. There is need to hire a team to work with from the earliest stages of the business. The teams should be carefully chosen and strategically placed to enhance efficient closing of the gap between the product producers and the prospective consumers. To add value, the products should be sold alongside with other familiar commodities.
Marketing has to do with availing products to the consumers. It is made up of four components namely; products, prices, place, and promotion. Product refers to what is offered to a market to satisfy a human want. In this case, the product to offer will be coffee and dessert. The quality of the product should be paramount. The product should be altered from time to time depending on the prevailing preferences of the consumers. Among the things to consider when offering the product will be; the pricing: settle on prices that will not frighten the consumers. The initial prices should be kept considerably low and be increased drastically as the demand increases. More demand means an increase in sales thus a consequent increase in supply.
One of the most important considerations when establishing the business is the location of the business premises. To begin with, a mobile restaurant will be necessary to ensure a large number of customers access the product. At the same time, the restaurant will be the distributor as it will be the one reaching out customer at strategic places and this is convenient to customers.(Tools for New Entrepreneurs, 2016).
Promotion of the product is another key thing. Customers should be kept informed about the new type of coffee and dessert through various advertisement. To start off, some customers may be given free products to give a trial. These will play a significant role in promoting the products. Having a committed team will ensure customers are convinced to try the products. The business should liaise with a local T.V and radio stations to run some of the adverts to reach more customers.
Starting the business with $75000 may not be enough to start a business that will deal with imported products. An external financer is necessary to boost the initial capital. As such, they need to visit various banks in downtown and to attempt loan application. This may generate enough finances to start off. In addition, Some banks can offer quick loans to boost the businesss initial capital.
More Time Needed to Weigh the Idea
Other key factors need to be considered. For instance, more time is needed to weigh the idea of introducing the new products into the American market. The coffee and the desserts business may not pick that fast. What interests the Egyptian people may not interest the American people. More investigation is required to gauge the possibility of the business succeeding in the American market.
Keep Saving for Retirement
Venturing into business may call for early retirement from lecturing at the university, hence loss of a direct permanent income. There is perhaps need to wait until the official retirement comes. This will provide room for more savings to be done as well as long-term evaluation of the prospective market and the chances of the business surviving (Tools for New Entrepreneurs, 2016). Conclusion
Starting any business is such a risky venture. There are all sorts of uncertainties that come along the way. Most business will go to extinction before finishing ten years. Though it may not be possible to evade all the challenges, careful decisions and considerations save the situation a great deal. Any entrepreneur needs to plan before establishing any form of business carefully. Every business has a vision for expansion. This vision should be manifested and nurture from the earliest stages of the business. For a business to expand, it is a reflection of the increase in demand of the products offered. More care should, therefore, be employed when handling customers
Small Business (2013). Ways for small-business owners to maintain work-life balance The Wall Street Journal. Retrieved from https://www.wsj.com/articles/ways-for-smallbusiness-owners-to-maintain-worklife-balance-1380648257..
Small Business Trends (2015). Challenges small business owners face. Retrieved from https://smallbiztrends.com/2015/04/3-challenges-small-business-owners-facee.htmlTools for New Entrepreneurs. (2016). HYPERLINK "https://www.entrepreneur.com/article/254721" 8 Challenges Facing the New Entrepreneur. Entrepreneur. Retrieved from https://www.entrepreneur.com/article/254721
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