Author: Petar Turcinovic, PhD

First, you have to have an outstanding product or service that adds value to your customer’s life. Second, you have to maintain business ethics, your values, keep your word, and deliver exactly what you’ve promised.

Congratulations! You made the decision to become an entrepreneur. You are going to dedicate yourself to starting a new business and are abandoning your steady day job. This is scary, unknown, and somewhat frightening. Dealing with this volatility is one of the hardest parts of being a new entrepreneur.

There are four challenges a new entrepreneur should confront to succeed:

  1. Dealing with the unknown.
  2. Cash flow management.
  3. Good to start, bad to run a business?
  4. Decision-making.

A good entrepreneur does not have to be a great manager, as your company is not a medal for your ego.

Dealing with the unknown

Furthermore, the best way for an entrepreneur to confront the unknown is to plan ahead the solutions for two fundamental issues. First, you have to have an outstanding product or service that adds value to your customer’s life. Second, you have to maintain business ethics, your values, keep your word, and deliver exactly what you’ve promised. If you fail to do so, you’ll fail to attract new customers and retain the old ones. In such a case – no cash flow management, team building, or activity to cut costs will be enough to save you from chaos reigning over your company. Therefore, go back to the basics of honestly serving others.

Cash-flow management

Challenge number two is the deep rooted fear of an entrepreneur who has to send an invoice after a job well done with the question “Will I get paid 30 days later, or even worse will I get paid at all?” Cash flow management is essential for an entrepreneur to survive. He has to pay his employees, contractors, and mortgage. Unless managed well, poor cash flow might mean the end of his business. What can be done to prevent this scenario?

First, you can negotiate a down payment to cover all expenses linked with a given project. Second, require faster invoice payments and cut the invoice period from 30 to 15 days. Third, do proper cash flow planning to understand critical points and risks in your cash flow. Fourth, as soon as possible put some cash aside in a reserve fund for unexpected risks like Covid-19 or a recession time. Fifth, ask your vendors to invoice you 60 or even 90 days to allow time for your payments to arrive.

Good to start, bad to run a business?

Challenge number three is to be trapped in the idea that you have to run the business you have started. A good entrepreneur does not have to be a great manager, as your company is not a medal for your ego. Modern entrepreneurs sell and start businesses. Selling is not a failure and can be a good business if you are a modern entrepreneur. The professional young entrepreneur’s in the 21st century have great education, great ideas and their actions are made with great understanding. Go on keep playing and enjoying the entrepreneurial game – smart way!

You have to maintain business ethics, your values, keep your word, and deliver exactly what you’ve promised. If you fail to do so, you’ll fail to attract new customers and retain the old ones.

Decision-making challenge

Lastly, the new entrepreneur typically underestimates the challenge of constant decision making. You will make hundreds of decisions a day and fatigue will set in. A new level of stress will surprise you and those first few volatile months will be crucial if you are to stay ahead of the competition. Therefore, you should prepare ahead. Take training in coping with stress, get rid of perfectionism, take a breathing lesson, learn from poor decisions others have made, do some role-playing in making decisions, or just ”keep deciding” swiftly about the items on your task list.

This concludes four challenges a new entrepreneur should confront to succeed. By knowing and applying them you have become a “homo entrepreneur” with challenges served for a breakfast. Please do not forget to enjoy your new lifestyle knowing that entrepreneurs do overcome the challenges!

If you need assistance take an MBA like the one at Alfred Ford School of Management.

The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Alfred Ford School of Management.

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