For companies who are ready to launch a new business, there are two possible scenarios – either of which will influence the range of challenges you face.
For example, if you’ve got a completely new business idea, there’s the fact that there is no ‘trodden path’ to follow, and every single decision you have to make is being made for the first time.
If, on the other hand, you’re looking to get into an established sector, it goes without saying that you will face fierce competition from companies who are unwilling to let you steal some of their lunch.
But whichever route you go down, there are certain common challenges that you’re bound to come across – and the better prepared you are, the more likely you are to be able to overcome them.
The challenge of being realistic. When you’re off to meet the bankers or venture capitalists, it can look fantastic when you have that carefully crafted spreadsheet with projected income and profit for the critical early years. But projections are only worth a damn if they’re realistic. You’re doing yourself no favours if you paint an overly-rosy picture of your business – either to outside parties or to yourself! The most important set of projections that you’re likely to make are the worst case scenario projections. If this comes to pass, would your business still be viable? Would you have enough cashflow to get you through to year 2? Would you have enough working capital to invest in your company to the extent that you need to?
Would you be able to recruit the talent you need? There’s never been a better time to be a job-hunter. Some of the best and brightest companies in the world are looking to hire right now, and offer a host of major attractions to new recruits – anything from the opportunity to work remotely to free onsite dining. So if you find yourself recruiting in the same space as Google, Microsoft, Facebook and others, have you considered what your company can offer that they don’t e.g. flexible working hours, and lower cost of living outside of Ireland’s larger cities? It goes without saying that you wouldn’t be in a position to match salaries of hyper-rich companies, but you can offer exposure to Senior Management from day one and faster paced career growth. This could make the difference between attracting average staff or excellent staff.
Can you scale quickly enough? For the vast majority of businesses, the figures only really get interesting when your business can scale to a magical ‘sweet spot’ where you have a wide enough customer base to support future growth, positive cashflow to enable ongoing investment, and an acceptable profit margin per customer or per product. The quicker you hit this sweet spot the better, but rapid growth brings all sorts of challenges with it – from hiring the talent you need to keeping your R&D pipeline in a healthy condition. There are also the challenges of going from relatively small micro-loans to more significant borrowing requirements. Will you have the balance sheet to support such borrowings, and can you borrow at a rate that makes your investment sustainable?
Can you fake it till you make it? As a newcomer to the market, one of the biggest challenges you face is winning the trust of your customers. You’re asking them to move away from a tried and trusted supplier and place their business with a company that doesn’t yet have a track record to boast about. At times like this, when it’s impossible to be everything you want to be for your customers, it’s essential that you project success, like a swan gliding, even if you’re paddling furiously under the water just to keep the whole show on the road. The expression ‘fake it till you make it’ is not an encouragement to lie to customers, but rather it backs the virtues of confidence, salesmanship and positivity.
Are you ready to thrive in a digital world? Even if your product or service is not high-tech in nature, it’s highly likely that you’ll market it and sell it – in whole or in part – in the virtual world. This is a world where the rules of a traditional bricks and mortar commerce don’t cut it anymore, and if you’re not prepared to hire very astutely for digital marketing expertise, it’s hard to see your business developing or thriving.