4 new entrepreneur problems you’re going to face and how to road-map them


There are common new entrepreneur problems that are almost universally faced no matter what industry you start your business in.

There’s an old saying that “Forewarned is forearmed,” so I want to help you go into your new enterprise with your eyes wide open and have a few tips on how to prepare yourself.

1. Money

The fact that you’re likely to face money problems as a new entrepreneur probably isn’t a shocking revelation, but let’s break it down to specifics so you get the big picture.

Living funds. The enormity of this problem varies with new entrepreneurs. If you’re single the problem may not be so difficult, if you’re married with a family, the landscape changes. Neil Patel wrote a lively piece for Forbes arguing that entrepreneurs should live with their parents. It’s certainly an option.

As I said, if others are involved, such as a spouse and children, you need to understand that the decision isn’t yours alone. Don’t let your passion become a set of blinders. Be prepared financially and be certain that those involved know the risks and the hardships – including financial and personal.

Operating funds. There are many tried-and-true ways to get the money to fund your startup, including saving, holding down a second job, borrowing, selling assets, and more. Crowdfunding will payoff for some. I’m encouraged that a possible easing of Dodd-Frank will help loosen up bank loans for small businesses.

Bumps in the road. Whatever your spreadsheet says you’ll need, double it. And track your expenditures to see if your burn rate is matching your expectations. If you’re outpacing your spending plans, you need to make quick adjustments.

2. Defining your niche

Defining a niche for the new entrepreneur is a process of:

  1. Deciding what you want to do, your passion,
  2. Getting a feel for the competition, and
  3. Finding your target prospect.

I’ll assume that number one from the list above isn’t a new entrepreneur problem you’re facing right now. If you’ve made it this far in my article, you must have some basic idea of what you want to do.

Now you need to spend some time researching the competition so you understand the playing field better than anyone else out there.

If you’re planning a local business, I describe how to use a great free online tool to evaluate nearby competition in this article. Lilach Bulloch has a good rundown of tools over on her website as well.

But with all of this information under your belt, you still have the most difficult task ahead of you: Defining why anyone should choose to do business with you over the competitors you have found. To be successful at this not only do you have to have a good answer to that question, you need to know how you will reach these prospects.

3. Reacting to change

The first steam-powered machine was built in 1698. The first effective gasoline engine was developed in 1859. The speed of technological change is quite a bit quicker today and you have to expect it.

Not only can you expect some fundamental technological changes in your marketplace, there may be technological changes that affect the way you do business. In other words, a competitor who starts later than you might start with better technology and therefore a pricing or quality edge.

You need to be ready to change both mentally and money-wise. One new entrepreneur problem is that they get so wedded to their original vision that they are reluctant to see any different way to “skin the cow.”

And be ready to make discoveries and have perhaps even uncover better ideas as you pursue your original business plan. Starbucks started out merely selling espresso makers and freshly roasted coffee beans, but while touring Italy, CEO Howard Schultz fell in love with European-style coffee houses.

4. Starting out and beyond

Step one is getting your foot in the door and that is, as I’m sure you know, a big task unto itself. Social media marketing, email marketing, all kinds of advertising, marketing hacks, and anything else you can think of should be part of your plans.

But then the question becomes, “What’s next?” An important part of that answer should be putting efficiencies in place. When you start out you throw all the spaghetti against the wall and do everything in the back end to please your customers. But to stay viable you have to get smarter than that.

When you start to get some traction, it’s time to pursue better ways to get things done – from the top to the bottom of your organization. As an ongoing guiding principle, you need to be constantly finding ways to do things at least one percent better today than yesterday. If this becomes part of your company’s DNA, it will protect you from competitors and push you to the position of the leading company in your industry.

So, are you going to face new entrepreneur problems? Yes, without a doubt. But with foresight, a willingness to act, persistence, and some creativity, navigating these problems will put you on the road to long-term success.