Updated: Aug 14, 2020
Over the last decade, there has been a sharp rise in entrepreneurship and startup businesses all over the country. While rewarding and fulfilling, the startup life poses its own set of challenges that you, as an entrepreneur, must face. From never ending to-do lists, to finding talent and putting out fires on a daily basis, you are consistently being pulled in multiple directions. Making sure to take time to identify your operational and strategic strengths and opportunity areas is vital to your business’s success. Listed below are some common challenges amongst startups and what questions they should raise for you as a business owner:
Using Your Resources Wisely
For your startup, properly utilizing your resources should be a key focus. The phrase “wearing many hats” resonates with entrepreneurs of any kind-but especially does it ring true to new business owners. Trying to juggle many tasks yourself while keeping your eye on your business goals can prove to be difficult. It’s easy to become reactive instead of proactive and bounce between competing priorities, which in turn can hold you back from executing larger steps in your business plan. While holding more than one role in your business is most likely necessary, you should question the efficacy of your resources and if they are best serving your business strategy and goals. Where can you improve? Are the operational systems in place effective? Your resources may be limited when starting out-whether that means limited staffing or funds for technology and other general costs, however ensuring you are investing time and funds strategically will help you keep you on track.
Time Management is a Key Factor in Your Success
Limited resources and time management go hand-in-hand. Entrepreneurs need to make sure that their time is being used in the most productive way possible. Best-selling author Tony Robbins suggests you treat your time the same way as you take care of your money, as a finite resource that must be conserved and used efficiently in order to reach your full potential. Should you be spending x amount of hours a week sorting through invoices and completing billing or are those functions best managed by another staff member or perhaps an outsourced company? Taking a step back and determining how you’re spending your time could save you even more time in the long run and relieve unnecessary stress.
Lacking Timely and Accurate Financial Data
Startup businesses are overwhelmed with financial information related to their revolving debts, payroll, operating expenses, accounts receivable and more. Keeping track of this information allows the business to optimize cash flow, pay taxes on time, evaluate the success of the business, attract new investors and accomplish other important tasks. To manage these challenges business financials can present, small businesses need to invest in software to help them keep track of important financial information. Do you utilize multiple systems to manage different functions? Or is there a way to centralize all of the information that you need in one place? These are important questions to consider.
No Written Operational Processes
When starting a business most entrepreneurs make an effort to create and implement processes for overall efficiency. While their intentions may be good, it is not uncommon for businesses of any kind to struggle with the adoption of business-wide processes. Especially given the ever-changing and fast-paced environment, paired with a growing employee base, ensuring everyone is on board and understands how to complete certain business functions can be more difficult for a startup than it seems. Keep in mind, a process is not a process unless it is written down. As your business grows, you need to be able to direct your team to a standard procedure to not only maintain consistency, but to make identifying operational inefficiencies easier for you. If everyone is following the same procedure you can eliminate the idea that deviation from the process is what is causing the issue-it is most likely the process itself that has room for improvement.
Finding and Retaining the Right Talent
Finding workers in today’s tight job market is challenging for any owner. Having to juggle job postings and weeding through résumés while addressing the normal demands of running a new company is no easy feat. To add to an already hefty workload, hiring for your startup can be a bit more difficult, as smaller companies often struggle to match the pay and the perks offered by larger employers. By utilizing the proper resources and having strong processes and systems in place like the appropriate technology, helps keep head count down and allows you to offer competitive salary and benefits to prospective employees.
How Can Startups Minimize These Common Issues?
Leveraging technology to improve efficiencies is one of the main solutions to the problems listed above. Utilizing a client accounting and advisory services (CAAS) firm could be an ideal option to explore. CAAS is a growing industry that uses cloud-based technology and automation to streamline particular accounting functions of your organization or business to improve overall operations and controls. By using technology, CAAS firms can offer startups the ability to outsource a portion, if not all, of their accounting functions to a trusted and knowledgeable team. Having an expert team partner with your business helps free up time and resources, all while obtaining the accurate and timely financial data you need to make strategic decisions for your business. If you have questions about working with a client accounting and advisory services firm, please reach out.