The 7 Biggest Challenges of Starting a Business (and How to Overcome Them)

The biggest challenges of starting a business

Consider the following seven challenges most entrepreneurs face when starting a business and take steps to overcome them.

1. Running the show alone is a business ownership challenge.

New business owners wear many hats as they get their operations up and running; they often handle sales, marketing, accounting, information technology (IT) and more. However, they likely don’t excel in all areas and may end up feeling overwhelmed. Chris Rivera, founder of The Ecommerce Accountants, initially thought being a good accountant was all that was necessary to become a successful accounting firm owner. “I quickly realized that technical expertise alone wasn’t enough; I needed to master skills outside of accounting, particularly sales and marketing,” Rivera shared.

Rivera needed to learn how to market the business, attract clients and communicate the company’s value. “I had to step out of my comfort zone and invest a lot of time into learning how to sell — something I hadn’t anticipated as an accountant,” Rivera explained.

However, even if you expand your skill set, it’s impossible to handle everything by yourself. If you attempt to do so, you risk hurting your mental and physical health as well as business productivity.

How to overcome the challenges of running the operation alone

When running a business, be honest about your strengths and weaknesses and understand that your time is precious. While you can — and should — embrace professional growth and learn more, as Rivera did, sharing the load is key.

Here are some tips for handling the myriad tasks required when running a business:

• Look for outside help: Rivera says building a strong team is essential for entrepreneurial success — though giving up control can be challenging. “Transitioning from being an individual contributor to managing and scaling a team was a learning curve,” Rivera shared. Still, your business’s growth and success are worth ceding some control. For example, hire a virtual assistant, partner with a digital marketing agency or find an IT partner to lighten the load.
• Utilize Small Business Association resources: Explore the Small Business Association’s (SBA) Office of Small Business Development Centers. This SBA program provides one-stop assistance to current and prospective small business owners — with experts in local offices throughout the United States. You’ll learn about numerous aspects of running a business.
• Get organized: To combat feeling overwhelmed, make your business more organized. Write down and define your daily tasks and goals. Once you’ve identified your to-do items, list them in order of priority and cluster-related tasks. Prioritizing helps you determine which tasks and goals to tackle at the most productive time of your day. Organizing and clustering help you handle similar tasks in the same period instead of sporadically.

2. Finding funding is a crucial challenge when starting a business.

Finding business investors and financing sources is one of the biggest challenges new business owners face. Not every business needs an immediate, significant cash infusion. But, you must ensure you can keep the business running for the long term.

How to overcome funding challenges

When starting a business, you’ll likely apply for business loans, seek a line of credit, self-fund the business or raise capital.

Here are some best practices for overcoming the challenges of securing funding:

• Utilize SCORE resources: SCORE, an SBA resource partner, offers mentors, education and advisors to help small businesses succeed. Visit the SCORE website to access mentor advice on the best course of action for your business’s funding.
• Consider a microloan: Microloans — typically for less than $50,000 — are another option for new business owners. Because they’re smaller, microloans are easier to qualify for. Plus, they provide borrowing opportunities that may not otherwise be available to you. You can use a microloan for a startup project, to get a business off the ground or as working capital. Or, you can fund equipment purchases, office leases or new hires. Different microlenders have various rules about using the funds and different qualification requirements (such as a minimum credit score).
• Consider an SBA loan: SBA small business loan programs aim to help entrepreneurs who want to start or expand a business. (The SBA also has a microloan program; contact your local SBA office to learn more.)
• Create an investor pitch: Before presenting your business idea to investors, perfect your pitch. Investors, banks and other lenders will want to understand your vision for success. The better you articulate this vision, the more likely you’ll get the funding you need.

3. Finding and attracting customers is a business startup challenge.

Attracting customers is an area where many new businesses stumble. After all, if no one buys what you’re selling, you can’t succeed. Ideally, you’ll conduct market research before launching your business to ensure you have a receptive market. Next, you must identify your target audience, understand their needs and determine what they’re willing to pay.

How to overcome the challenge of attracting customers

To find and attract customers, you must create a marketing plan that identifies the following:

• Your target market.
• Your product’s strengths and weaknesses compared to the competition.
• Your marketing position and message.
• Where you plan to market your product.
• Your marketing budget.

Many new businesses have slim marketing budgets, so low-cost ways to make a big impact are essential. For example, marketers on a budget can consider the following:

• Creating social media marketing campaigns.
• Setting up co-marketing agreements with companies that sell complementary products.
• Creating email marketing campaigns.
• Utilizing video marketing to create brand trust.
• Hosting events or initiatives the media will cover.

4. Maintaining a work-life balance is challenging when starting a business.

Any seasoned entrepreneur can tell you about the challenges of maintaining a positive work-life balance. It’s easy to find yourself on the computer from early morning until dinner, only to spend another few hours at night crossing more items off your list. You may suddenly find yourself focused on work- and business-related tasks, neglecting necessities like exercise, time with friends and family, and sleep.

How to overcome work-life balance challenges

As difficult as it might be, establishing a routine that sets clear boundaries between work and free or family time is crucial. Everyone manages their days differently. But, if putting “run three miles at lunchtime” on your calendar makes you stick to the commitment, then 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.

5. Not having a safety net can be challenging for entrepreneurs.

Working a full-time job can be challenging, but a steady paycheck has numerous benefits. For example, you can breathe easier knowing you have employer-provided health insurance and other benefits (e.g., guaranteed pensions and retirement plans).

When you strike out on your own, you won’t have the financial safety nets full-time employment provides. Your salary isn’t guaranteed until the business starts making adequate money; also, if you pay yourself a salary, you’ll have to pay payroll taxes. If you want to establish health insurance or benefits, you must pay for it from the company’s coffers.

How to overcome the lack of a safety net

Not having a financial safety net can feel daunting. However, you can relieve the stress in several ways:

• Work while you build your business: Consider starting your new business as a side hustle while maintaining the security of a regular job. This choice requires long hours and hard work. However, you’ll appreciate the steady income and essential benefits as you build your company.
• Fund your business: Another alternative is obtaining comfortable business funding through an angel investor, business loan or business grant. With sufficient funding, you’ll be able to pay yourself a small salary as you operate and grow your venture.
• Minimize your startup costs: Depending on your business and industry, you can work to minimize your startup costs as much as possible while supporting yourself via personal savings and other assets.

6. Accountability can be a significant challenge for new business owners.

Any career requires a measure of accountability for deadlines, projects and performance goals. However, when you own your own business, all responsibility rests on your shoulders. You must be self-motivated enough to complete tasks and effectively manage your time and efforts. If something goes wrong, there’s no one else to blame.

How to overcome the accountability challenge

Most entrepreneurs embrace the idea that the buck stops with them. However, they must set themselves up for success with carefully honed prioritization and time management skills.

To prioritize your tasks, consider the following:

• Select a digital calendar or project management app or platform with reminder functionality.
• Create a to-do list with the most crucial tasks prioritized.
• For each task, assign a deadline and estimate how long it should take to complete.
• Continually manage and oversee your tasks to ensure you stay on schedule.

Time management skills can be learned and enhanced. Consider the following ideas:

• Take a class in time management.
• Choose a time management method like block scheduling. This is where you concentrate on one type of task within a specific period (e.g., read and respond to emails from 8:30 a.m. to 9 a.m., call customers between 9 a.m. and 10 a.m.).
• Focus on your most crucial tasks when you are the most productive and clear-headed.
• Limit time-wasting activities, such as scrolling through social media feeds.
• Consider hiring a freelancer to handle some time-intensive tasks.

7. Hiring (and firing) can be challenging.

New businesses need the right team in place to grow and succeed; owners must hire various full-time and part-time employees to help lighten the load. Startup employees typically wear multiple hats. So, entrepreneurs look for multi-talented and flexible professionals who can contribute to operations and growth.

However, finding the right team members is easier said than done. “I think the hardest thing in any business is hiring the right people,” said Thayer Sylvester, cofounder and chief executive officer of Carve Designs. Too often, someone who looked good on paper isn’t a fit — and business owners must consider letting them go before investing any more funds in them.

How to overcome hiring and firing challenges

Hiring is never a perfect science. However, startups can take measures to help ensure they pinpoint professionals who fit the company’s mission and values. Consider the following hiring tips:

• In your job description, beyond listing the job responsibilities, be very specific about the type of person you’re seeking for the position.
• In interviews, explain the company’s culture and how important hiring for a cultural fit is to you.
• Discuss the hard and soft skills the position requires.
• If you’re in a competitive hiring market and don’t have the budget for a generous compensation package, consider offering stock options or profit sharing.

Still, no matter how careful and thoughtful your hiring process is, some new employees won’t work out. Sylvester advises cutting your losses as soon as possible when you know the employee isn’t a fit. “From time to time, we don’t hire the right person,” Sylvester noted. “Learning to recognize that quickly and having open dialog around why a certain person is not the right fit is critical to the organization’s success, and then moving on and hiring the right person.”

Letting an employee go can be emotional and challenging; remain calm, thank them for their work and then explain the reasons for your decision.

Resources for starting a business

In addition to the SBA and SCORE, many resources can help entrepreneurs set up and run new businesses.

1. Turn to your local chamber of commerce.

Your local chamber of commerce likely has educational materials and videos on starting a business. But even more impactful is meeting, mingling with and getting advice from established business people in your area. They can help you navigate local government requirements, point you in the right direction when you need vendors and give you industry-specific advice.

Your chamber of commerce also likely offers various networking and marketing opportunities. Such opportunities include directories, trade shows, job fairs, and leadership and lunch-and-learn events. These resources are particularly helpful for B2B businesses.

2. Create a LinkedIn profile.

Consider creating a LinkedIn business profile. In addition to peer-to-peer communication and networking, LinkedIn helps business owners learn about and participate in free webinars, market their businesses, and join industry- or topic-specific groups. LinkedIn also has a small business resource center with free online courses, written resources on various business topics and virtual events.

3. Find a mentor.

Do you know someone with experience in the type of business you’re starting? Ask them to become your mentor. A mentorship is an informal arrangement where a more experienced professional agrees to help and discuss business questions and challenges with you. Mentors can give you great advice, pose questions and issues you may not have considered, and help keep you focused and balanced. They can also introduce you to potential customers, partners or funding sources.

4. Check out HR.com.

Although you may start with no employees, you’ll probably need to hire some as you grow your business. HR.com is an excellent HR resource that can help you stay on top of employee and workplace-related regulations, taxes, and benefits. It has free HR compliance posters you can download and print, industry trends and research reports, and thousands of educational webcasts. After you hire your first HR person, they can take HR certification prep courses at HR.com to earn recertification credits. [Read related article: The Best HR Software for Startups]

5. Access Google’s business resources.

As soon as your business is up and running, create a Google Business Profile. This way, you can control your business’s information across all Google services. Your Google Business Profile will ensure you appear in local searches, improve your website’s SEO strategy, give your company credibility and allow you to gather reviews.

Google also provides tools for entrepreneurs at a nominal price — $6 per user per month — via Google Workspace. Workspace includes Gmail, Google Drive, Meet, Calendar, Chat, Docs, Sheets and Slides — enabling seamless communication and collaboration. Google Analytics, which is free, shows you how many people have visited your website, how long they stayed, where they came from and other pertinent information.