Building a successful business is more difficult than building an innovative solution
Every new entrepreneur who has not spent years in corporate life has the advantage of an unbiased look at business opportunities, but at the same time has the disadvantage of missing critical business experiences that can cost them dearly in their first startup venture.
Let’s face it: Most like-to-be entrepreneurs don’t even come close to extraordinary people like Elon Musk (who just announced his Master Plan, Part Deux). First failures also didn’t stop Bill Gates (before Microsoft would change the world of software, there was Traf-O-Data. The idea was to optimize traffic and end road congestion, but the demo for local county officials didn’t work) or Jeff Bezos (before Amazon became a household name, Bezos had several failed ideas. One of the most notable was an online auction site, which evolved into zShops, a brand that ultimately failed. Still, Jeff Bezos would repurpose the idea into what would eventually become the Amazon Marketplace).
The reality is that most startup-entrepreneurs who experienced early failure are so discouraged – or financially destroyed – by their business learning experiences that they never try again.
To avoid early resignation, it’s crucial for any entrepreneur to be aware of unexpected obstacles that could come up along the way.
Martin Zwilling, founder and CEO of Startup Professionals, a company that provides products and services to startup founders and small business owners, composed this list of 8 key business growth challenges that every first-time entrepreneur may not anticipate:
1) It takes relationships to make a business work. An innovative solution is necessary but not sufficient to build a business. Businesses require people relationships, to find the right team, investors, contract vendors, and attract customers. As an introvert and a techy, I know well the challenges of building relationships in today’s competitive world.
2) Startups don’t come with formal training courses. New entrepreneurs quickly find that what they learned in business school is no substitute for real-world business experience and training. Larger enterprises let you learn as you go, with minimal risk, and they pay for leadership training, employee management and new project management tools.
3) A successful business is a long-term effort. Entrepreneurs are an optimistic and passionate group, who normally expect their idea to go viral soon, and success to follow shortly thereafter. They aren’t mentally prepared for the long-term grind, with repeated tough challenges along the way. It’s a round the clock job with no time off for vacation or fun.
4) Managing personal finances separate from the business. Being an entrepreneur is a lifestyle, making it hard to isolate the startup finances from family financial stability and future retirement requirements. Startups don’t come with pension plans included. Startup setbacks can easily cost you your house and credit rating.
5) Building a startup is more about love than money. People with experience in big businesses have learned that you won’t be happy even if well paid, unless you enjoy the job. Entrepreneurs that love to invent new things, but hate business, need to find the right partners before embarking down the path to a new business.
6) Not having a predictable income is an ongoing source of stress. People don’t appreciate a regular paycheck until they don’t have one. Entrepreneurs never know when they will be hit by technology advances, new competitors, economic downturns, or loss of a major customer. Early funding is a full-time effort, and it’s no fun for anyone.
7) Entrepreneurs can be lonely at the top. Once you have formally established a startup with you as the CEO, all former teammates will see you in a different light as the boss. Quickly, it will be difficult to get unbiased input, and everyone will wait for you to make the final decisions. It’s hard to find someone to share your fears and challenges with.
8) Peer perceptions of entrepreneurs are not always positive. It’s popular today as a young entrepreneur to talk about your dreams and initiatives, and everyone seems to look up to someone running their own business. Later, colleagues with jobs in large corporations may look down on you as a person without job security or a clear career.
In all cases, Martin Zwilling advices to aspiring entrepreneurs is that they first spend some time working for another startup or in a corporate environment, if they aren’t absolutely certain about their lifestyle preferences. Life is too short to spend most of it in stress and pain, handling challenges you never anticipated, even if you are convinced that you can change the world.
Start Up’s: Business experience Is crucial
New entrepreneurs quickly find that what they learned in business school is no substitute for real-world business experience and training
Aspiring entrepreneurs should first spend some time working for another startup or in a corporate environment.
All too many others are so discouraged or financially destroyed by their business learning experiences that they never try again.