The 5 biggest challenges facing startups and entrepreneurs

DropsToday’s expert guest blogger is Andy Green, Client Director at THP, an ICAEW accredited Chartered Accountancy firm in the south east. In his blog, Andy focuses on the challenges facing startups and entrepreneurs. Here are his thoughts on the challenges facing startups and entrepreneurs.

It is no surprise the digital economy continues to flourish, with a recent report stating that over 750,000 new digital jobs will be created in the UK by 2017. This in turn is driving a secondary wave of entrepreneurs, with more and more former employees of larger recruiters going it alone to get their own piece of the action.

The risks of starting your own business are well publicised, but I wanted to find out what people had actually done it really thought. I came to see that the drive for many is not about money, it is about being their own boss, making their own decisions and driving their own career and life path.

This outlook was summed up beautifully by one company founder. “I want the freedom to exercise new ways to help organisations solve one of the biggest challenges facing most businesses: finding the right talent.”

5 biggest business challenges for startups

From speaking to numerous entrepreneurs that have made this jump, there are 5 common challenges they all faced and try and overcome on a daily basis:

#1 Time management
The sheer scale of running a business often results in lots of jobs being half done and the founder losing focus on what really matters.

#2 Choosing the right opportunities to pursue
Suddenly strategic business decisions have to be made.

#3 Selling the idea to former colleagues and contacts
These people are needed to help push the business forward.

#4 Gaining an understanding on many alien concepts
From accounting to employment legislation.

#5 Not trying to do it all yourself
A massive challenge to any new business owner.

Getting stuck in

There seem to be a few core areas that businesses that have done this very well have in common.

Firstly positioning the business within the specific niche in which the founder has expertise and mapping out the first 3 years with a proper business plan.

The smaller firms have saved valuable money by working from home or a rented office in the outskirts of London, whilst renting a “front” office near Old Street in London, the “Silicon Roundabout”.

“As we always go to clients premises for meetings and pitches, there seemed little point in having a fancy office for ourselves, especially not in the early days.

Something else seen as key is buying in expert advice from the word go, with specialist accountants and lawyers in place to ensure all agreements, whether they are shareholder agreements or business contracts, are watertight. Having well connected professional advisors has also helped with networking.

Using LinkedIn

The unanimous answer to the question, what is the biggest challenge facing the sector in the short to medium term was Linkedin. The benefits of which are obvious for anyone to see.

It already plays a huge part in recruitment for internal recruitment teams/HR managers. and a reported 225 million users with people from all industry sectors and job titles, generalist recruiters with no particular niche market knowledge will struggle to add value to employers.

The challenge of embracing and facing this was however something that founders were very passionate about. As one remarked, “It cannot replace your network of trusted contacts and your professional expertise in the market place”.

The message was clear, stick to what you know, stay true to your core beliefs and be brave.

Book a free business advice session

Join the discussion with other SME owners and finance professionals over in the ICAEW Business Advice Service LinkedIn Group. Alternatively, book a free business advice session with a local ICAEW Chartered Accountant by entering your town or postcode in the search box below.

*Results will be displayed on our Find a Chartered Accountant directory website.

 

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