Blockers to starting or growing a small business?

[DaZTL]

If you have a small business (or want to start one), what blockers do you feel exist that are preventing you from growing (or starting)?


What are the day-to-day pains and fears you face?
What things seem to be really standing in the way?
What do you think would help you to get around these blockers?

[Kreater]

If you have a small business (or want to start one), what blockers do you feel exist that are preventing you from growing (or starting)?


What are the day-to-day pains and fears you face?
What things seem to be really standing in the way?
What do you think would help you to get around these blockers?


1: Fatigue

Fatigue and exhaustion (lack of sleep = stress) is the biggest obstacle for me. A business owner should work 20-40 hours a week. I currently work 50-70 hours. It just doesn't work. Because everybody looks up to the owner for leadership & guidance. If the business owner is in a bad mood then everybody else is. If the business owner is fatigued & tired then everybody else faces the negative results. The mood of the owner is more important than everybody elses' as bad as this may seem to admit. If you own your business then you need to make certain that you are well-rested and feeling good on a weekly basis. If your mood is more negative than positive then your business probably will not grow.


2: Loans/Debts

After owning a business for three years now, I would never, ever advise people (especially young people) to begin new business with debts and/or loans. I would advise to save money first, clear all debts first, before you open your doors. No school loans, no car loans, no business loans. I know that many will disagree about this; but I advise others to start a new business with a "clear conscience" and no debt. Debts/Loans only add to the stress factor. Beginning a business, you theoretically should have no stress from the onset. Stress is the biggest roadblock and challenge I face, day-to-day. The lower amounts of stress, the more business/profit I can acquire. I'm most confident about this bit of information/knowledge before everything else.


3: Resolutions

As already mentioned, absolving all debts/loans before opening your doors is important, albeit impractical. I realize that today in our country (u.s.a.) opportunities are dwindling. It is requiring more & more huge loans to start businesses. The risks are getting higher, rewards getting lower. So environment is important to consider too. My best advise and solution is to start with a clean-slate. Save $100k, before you start your business. Work 20-40 hours a week, hire employees at your discretion, and if you cannot make an earning/profit after spending $50k of your starting fund, then you should possibly quit/end your business, at least for awhile, and then try again after fixing the previous mistakes.

If you blow through $100k without making a profit, or losing it all, then business ownership/management simply is not for you. Now you know, and you ought to work for somebody else. Because business ownership and entrepreneurship should not cost more than you make in the long-run.

[Economic Methods]

I Agree with Kreater, but all of those are personal blockers. Each industry has it’s own blockers aka barriers of entry. As someone starting a new business you need to have a define list of what these are for your industry and a well thought out plan aka strategy to overcome them.

In addition, to Kreater three years in and your still working over 40 hours assuming you are not a workaholic. This could means a few things but it boil downs to either your industry is rocky example your industry is shrinking or is very cyclical. On the other hand, your business may have some inefficiencies internally or you are currently expanding. There is nothing wrong with working long hours if you can pin point exactly why you are, but if you can then maybe, you should take a close look into your operations.

[Harold Mansfield]

To me there's three things:



Lack of money: The "pulled myself by the bootstraps" story is relied on far too much. Starting a business takes money.
Money to build it correctly. To pay the bills while you're building. Money for marketing.
Lack of focus: Unrealistic expectations about how easy it will be and how fast the money will start coming in. Most people lose focus when times get tough and can't get it back.
Lack of knowledge: Many new business owners are unwilling to roll up their sleeves and learn things that may not come easily, may be boring, or difficult to understand. Therefore they end up spending more than they should relying on someone else to know, and can't pick up the slack and do for themselves when times are lean.


I guess there's 4 things. Lack of confidence/self doubt holds a lot of people back from even trying. You can't be scared to fail or you will never succeed in anything.

[Fulcrum]

I both agree and disagree with Kreater on this.

1) Fatigue, exhaustion, and stress are major stumbling blocks for many. However, I have yet to meet a business owner, especially one that works in the business, that only works 20-40 hours/week. Most owners that I know and deal with work 60 hours/week on average and more when panic work happens.

2) Loans and debts can and will be detrimental to a new business. This is not to say that one should not take on debt when it makes sense. If it can be paid back based upon your current income and the money is going to be used to fund inventory, equipment or real estate than it may be a smart move. Prudence is required and you have to remain diligent that everything gets paid on time, every time.

3) Can't really argue about too much here except for the general business environment. In my opinion, I think the marketplace is ripe for small business. Many industries are dominated by 1-3 major players. These companies only want to deal with their "preferred" customer and anything that falls outside of that norm will ignored, turned down, or priced so high that it is not worth it for the little guy. A flexible and agile company that caters to these smaller businesses can make a reasonable profit while remaining sustainable.

Many companies can blow through a $100K in the blink of an eye. I know of one company that blew $100K chasing down a customer's bad $3 bearing while spending another $400,000 (give or take) on their website and production management software (both only compounded the problems they were trying to solve). This company is still going strong last I heard.

Actual blocks for people looking to go into business:
1) Poor advice - how often have we all been told that we're crazy to go into business for ourselves in this economy?

2) Similar to #1 listening to the media - when's the last time mainstream media celebrated the success of a small company?

3) Paralysis of analysis - we spend so much time trying to find all the answers we never start.

4) Fear of failure - none of us want to fail and most are not willing to lay it all on the line.

[webdesignphx]

Great post! Can't say anything that has not already been said! ;)

[dranieri]

Since we do so many different services, I am stuck with paying a lot for Worker's Comp, GL & auto insurance. So finances are a big issue and some weeks I am not sure I will have enough to pay for the bills and payroll. Sometimes I feel like it is tough to make a profit when every time I turn around, I am paying for something else, lol.

Most of my customers pay at the time a service is done but I have some commercial customers that seem to take their time paying even though they want us to jump over hoops to get the work done.

I am always looking to find less expensive resources as well as change the structure to how we get paid so that we do get ahead.

[RKZENITH]

I've had a few hurdles.

1. Rent is crazy, six-times-my-house-payment-on-the-low-end crazy, so I don't have the actual storefront yet.
2. Not having a storefront, I sell through venues like eBay and ComicCon. Don't get me started about the former and it's difficult to find many of the latter in this state.
3. Everything that I order is delayed. It's utterly impossible to order for a convention and products risk going "stale" between them.

On the other hand...

1. I keep very good records and can file my own taxes, obviating the need for an accountant.
2. My software engineering degree enables me to program what somebody else would have to purchase.
3. I've been getting better at choosing products that, after a period of staleness, become far more expensive.

While I'm not doing as well as I'd like at this, business has been steadily improving year over year.

[Blessed]

1: Fatigue

Fatigue and exhaustion (lack of sleep = stress) is the biggest obstacle for me. A business owner should work 20-40 hours a week. I currently work 50-70 hours. It just doesn't work. Because everybody looks up to the owner for leadership & guidance. If the business owner is in a bad mood then everybody else is. If the business owner is fatigued & tired then everybody else faces the negative results. The mood of the owner is more important than everybody elses' as bad as this may seem to admit. If you own your business then you need to make certain that you are well-rested and feeling good on a weekly basis. If your mood is more negative than positive then your business probably will not grow.

I agree and disagree with this.
Fatigue is a hurdle to be aware of and overcome - it can cause you to make bad decisions, make mistakes and forget things. However your 20-40 hour work week for a small business owner has me baffled. I own Crazy Dog Creative and I typically put in 5-30 hours a week - but it's a part time business and I make part time wages, if I wanted to make full-time wages I would need to put in an average of 40 hours a week - sometimes it would be more, sometimes less. My husband works full-time in management for a company and as a salary employee is expected to put in 50 hours a week. Not an unusual or out-of-line expectation in his industry. They are in a growth/expansion faze and it hasn't been unusual for him to put in more than 50 hours a week though... and he's just an employee. For a small business where the owner is the manager it makes sense that you would expect to put in that same 50ish hours a week, possibly more. I will agree putting in much more than that 50-60 hours a week long term can lead to exhaustion which can lead to negative results.

[Kreater]

4: Competition

It seems like any small success or gain I acquire, somebody (usually a new person that I haven't met before) steps in and wants to grab it. People are attracted to success. And as soon as people smell it, they come running and wanting to take it or copy it. Both of these are very bad. Personally, my books are almost balanced year to year. I have not gotten a profit yet. But I know, as soon as I do, I'll have new competition in the area. That's the thing about small businesses. Success can be much more dangerous and risky than failure. Because people are greedy. There are specific types of competition. People will denounce and trash talk you, since they are loyal to other businesses. A competitive business may try to buy you out for less than you're worth. And, in my area, the most common competition is a dozen other small businesses just waiting to start up, copy ideas and menus, and attempt to do what I do next door, flooding the market.

However, what I know is, these new businesses don't have the strength that it takes to do what I do. I know they'll quit or leave after a year or two. So I can effectively wait these people out. However, in that meantime, they consume the profit I should be making.

[Blessed]

they say "Imitation is the sincerest form of flattery" Charles Colton circa 1820

We fight that same competition battle with the children's consignment sale I work with - we've found that while the competitors do draw shoppers and consignors away from us, usually it's the ones that we aren't a good fit for anyway. Those who are really just looking for a huge garage sale, rather than an almost retail store experience - with high quality items for sale. But it's still aggravating!

[Fulcrum]

Competition, regardless of industry, will always exist. I've lost work to them and I've gained work from them. Some will race you to the bottom (this really gets me going) with the hope that you will either go broke or look into another niche for work.

[Blessed]

I've found it interesting to ask people coming to us from the competition why they are making a change - it's eye opening and has allowed us to implement some permanent changes that have improved our business overall and given us marketing points to use when reaching out to the community. If someone is successful, especially someone I'm competing with I want to know why - so that I can improve my business. I can't do anything about the competition - but I can make my business better than it was yesterday.

[will.i.earn]

I'd like to add something that has been annoying me as of late. It's the fact that so many are wasting their time with social media platforms. There's nothing wrong with having a presence in Facebook, Google+ etc... It's just painful to see too many relying on their business' sales in those platforms.

Don't take my word for it. Ask people whom are actually making a living online and they'll tell you to just focus on building your email list.

[RKZENITH]

I'll see your social media and raise you a business plan. Out of 100 people telling you that you need one, 99 have no idea what one actually looks like while the remainder is going overboard trying to sell you "market research" that's an out-and-out pyramid scheme on par with the worst of what's advertised over the radio.

[Jschultz]

If you have a small business (or want to start one), what blockers do you feel exist that are preventing you from growing (or starting)?


What are the day-to-day pains and fears you face?
What things seem to be really standing in the way?
What do you think would help you to get around these blockers?



Fears
Today: Finding talent
Ten Years ago: Cash Flow

Standing in my way
Today: Finding and keeping talent
Ten years ago: Being able to satisfy client in a timely manner

Blockers:
Today:Slow steady and plotting
10 years ago: Slow steady and plotting

[DeniseTaylor]

Wow. The first thing that went through my head when I read the question was lack of energy. Then I scrolled down and saw the first response:


1: Fatigue

I utterly agree. It takes so much energy to start a new business and make it fly.

The other thing is the financial burden of getting a busy to make money. Plus the risk of failure and loss of any investment.


These are the main reasons that I chose to build an e-business. Much less risk and lower overhead. Plus building it on a subject I know and love makes it much more interesting work. So my personal solution is going online to start a business. But for brick and mortar businesses, I think something that would really help is a good support system. One of the worst things about small business is lack of support. These forums are great, but having others in the same boat - especially those in the same field really provides insight and makes all the challenges easier, I think.