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6 Common Problems New Businesses Struggle with & How You Can Overcome Them

Like any other endeavour, starting a new business is not without challenges. And what makes this step more daunting is that it involves money you can lose if you make the wrong choices.

Nonetheless, having your own business will always be one of the most fulfilling experiences you will ever have, which can create an impact. Hence, starting your own is definitely worth the shot. And in case you're already taking the plunge, here are some of the common problems you must take note of and how you can overcome them.

Not Having a Budget Plan

Going into business without having an actual, concrete plan for your money is like putting all your eggs in one basket. You're bound to fail, and it's more likely that you'll end up broke.

Without a business plan or any financial blueprint, even the most viable idea will waste. Thus, before taking the next step, do your homework and research to understand how much money you can invest in this business while keeping your bills afloat. Know how much you can spend and how much you must make every specific period to ensure your business serves its purpose.

Mixing Business with Personal Finances

It's just a tiny business; why bother getting a separate checking account?

These two accounts are entirely different, and you should treat them that way to avoid running into trouble. You can never predict how your business will grow and where it will go, and if you keep mixing it with your finances, sooner or later, things will get complicated.

Inconsistent Cash Flows

Nothing hurts more than being in business, pouring your heart and soul into it, only to find out that you still have no money.

This happens when there are inconsistencies with cash flows—when you get paid late or, worst, not at all. With this type of situation, the best thing you can do is prepare for the worst by keeping a reserve fund.

In case clients do not pay on time or if money is not rolling in as fast as you want, keep a backup at the back that will see your business through to another profitable month. It would also help to keep an eye out for both the threats and opportunities that can make or break your financial plans.

Not Allocating Enough Budget for Marketing

One mistake that new businesses seem to always commit is not allocating enough budget for marketing.

According to experts, including the U.S. Small Business Administration, small businesses should allocate around 7% to 8% of their gross revenue for marketing (CommonMind). This is especially the case if you're running a B2C business which entails that your revenue is dependent on the number of people you can reach.

Incurring Too Much Debt

This one is often the result of all the problems mentioned above combined.

This type of situation is not just difficult to handle, it can have detrimental effects on your business. Even after you're able to pay off the debt you initially incurred, there are struggles that will continue to hound you, like the fear of bankruptcy and never-ending interest rates.

To avoid this type of issue, make sure you plan everything out thoroughly, dedicate enough time to research your market and be intentional with how you manage and spend your money. This way, you'll be able to make better decisions that won't lead you to the debt trap.

Not Having a 12-month Plan

So you have a mission, a vision, and a number of long-term goals for the business. But how exactly are you going to achieve these?

This is where a 12-month business plan comes in. It's the perfect guide for your business because it'll serve as your map to where you're headed. It will also make managing your business a lot less overwhelming as it will provide you with what to focus on in the short term.

Plus, it'll prevent you from losing sight of your goals by helping you prioritise which tasks are urgent and should be addressed immediately and which ones can wait for a while.

And that's a wrap!

Although it can be intimidating, starting a business can be very rewarding. But in order to make it through the first phase of your journey, you must equip yourself with both the confidence and the right knowledge to overcome all the challenges you'll encounter.

And if you need a hand in getting started, don't hesitate to reach out to me! We'll craft not just your 12-month business plan, but your long-term strategy to get you where you want your business to be.

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