Three most common challenges for small businesses and start ups

Rome was not built in a day, so the small businesses. Let’s find out the Focal point of new start-ups/small businesses and if we are spending our limited resources efficiently. New start-ups and small businesses often has similar constraints. Below are the top three common constraints we shall attempt to demystify in this article.

  • The most common is the limited Finance.
  • The Second in our list is limited skills (Technical/Marketing/ Branding/legal& Financial) to set-up the full fledge business and
  • Third is of course the time.

Let’s discuss how these three constraints was dealt by other businesses who are successful today or doing well.

Limited Finance –  Yes it is limited, and if business don’t generate any revenue for 3 to 4 months, the panic creeps up. So the small businesses starts looking for quick inflow of funds (through Affiliate Marketing, google ad words etc.). There is no harm, as long as these are managed and in sync with your own product and brand.  The most important is not reducing your website performance or your brand value, that would really hit your own creative product or services.

Second solution for dealing with limited finance is share your cost, we are very fortunate that we are living in the era of information age. You can search for investors who wants to invest in your product. Of course you need to sort out all the legal stuff between you and investor. Also, it is a good idea to outsource some of the activities to reduce the cost and increase the quality, this also addresses the second constraint of skill gap.

Skills Gap – Being a new start up with limited resources it is complicated to strike a balance between your time spent to save money or earn money. If a business women who is very creative in jewellery starts learning how to create website, Payment gateway and security, Branding and Marketing etc.  to save extra bucks but at the cost of core product /services it’s not very optimum utilisation of time and efforts.

Honestly it’s for every business to decide their own model, but here is a formula which can assist in your decision of DIY or outsource (Opportunity cost)

Opportunity cost between the two – Time spent in a week to learn the skill + Money spent to get training etc. + Ongoing time spent in maintenance and skill upgrade, and other subjective factors to consider (Quality, security, legal etc).  Now if the same time and money you would have spent in your core product building and outsource other competencies?

It is complicated to put value to all the factors,  especially subjective factors like low quality risk, security risks, legal risks when you don’t go to professionals and do it yourself.

What the other successful businesses did? When they were small start-ups with limited resources, the research on 50 plus case studies shows they outsourced most of the competencies required to build the business and concentrated on their core product.

Limited time can be managed efficiently if the start-ups and small businesses can manage the above two.

Finally, my best wishes to all the amazing, talented start-ups and small businesses.

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