When I talk to potential business owners and even those who have been in business for at least 3 years it's interesting to hear them say how challenging business ownership is and that they thought it was going to be easy. Even though they have heard the statistics that start-up businesses don't survive the first two years of business and that data shows that only 5 out of 10 new businesses survive for 5 years, many are still convinced that it's a pretty easy road to tow. What they fail to realize is that ALL businesses, start-ups and existing, will face 3-D (delays, difficulties, and dead ends). One characteristic you must have as an entrepreneur is PERSEVERANCE because you will face many unexpected challenges in business and you must be prepared to handle them and set free.
Let's look at some examples of 3-D that businesses face and some ways they can be delivered.
DELAYS: You have been diligent in putting your business plan together and ready to take it to the bank for funding. Eager to get the business up and running the bank is requiring additional paperwork, financials, etc. So the funding process has been delayed from 2 weeks to 6 weeks.
DELIVERY: Be proactive and eliminate the delay. Make sure you have all your financial documents prepared. Ask the bank their requirements beforehand so you are not scrambling to find the information. Usually, they request the following:
Balance Sheet
Income Statement
Cash Flow Statement
Business Documents
Detailed list of assets and proposed collateral
Personal Financial Statement
Credit Reports
3 years of personal tax returns
Business Tax return (existing businesses)
Business Plan and Marketing Plan
Sources and Uses Plan
Loan Request Package
DIFFICULTIES: A common problem for many business owners is that they think they can do everything on their own. They use the excuses of "I can't find qualified people" or "Nobody can run my business like I can. I don't trust anyone with my baby" or "I can manage this alone until business grows". This "one-man band" strategy may seem like a way to keep costs low at first, but it's not the smartest way to ensure long-term success. They become the little rat on the wheel that is going nowhere. Business operations become more difficult to control as time progresses. Plus being a "one-man band" does not give you the opportunity to work outside the business because you are inundated with handling the day to day operations.
DELIVERY: Utilize your network of contacts or social media to find referrals for qualified, professional employees. If you cannot afford to hire a lot of employees contact trade schools, colleges or universities for interns. They may be available for free or a small stipend.
DEAD ENDS: The business is at a standstill, sales have declined and the need for your product or service has diminished. Your business has come to a dead end.
DELIVERY: A few options come to mind. First, revisit your business plan! It is your roadmap and could offer suggestions on next steps. If you don't have a business plan-WRITE ONE! This may be the reason your business is in the situation it is because there was no plan of action. Second, consult with a business advisor to assist in identifying the problem and consider solutions. Do you need to target different customers, change your pricing structure, leverage the existing infrastructure, etc.? Third, see if there is an opportunity to change directions and create a derivative (a specialized company created out of a broader company). For someone who has a computer sales business the derivative might be a computer repair and maintenance business.