The 8 toughest challenges you’ll face as a start-up business owner
From dealing with redundancies to keeping positive, successful UK entrepreneurs share the hardest challenges they’ve overcome in business…
Think starting a business is pretty straightforward? Think again.
From getting your business idea off the ground, to raising finance, and managing the process of hiring and firing, there are a number of obstacles you’re likely to face in the process of starting and growing a business.
While going it alone has a range of benefits and can bring a great deal of happiness – not least independence, fulfilment and potential profits – there are a number of ‘lows’ you will have to counter if you wish to become a successful entrepreneur.
With that in mind, we’ve gathered key insights from a cluster of established UK start-up and small business owners, including Secret Escapes co-founder Tom Valentine and BreatheSport’s Barry Houlihan (who sold his former venture Mobile Interactive for $75m), on the eight hardest challenges they’ve had to overcome in their business journeys; from start-up through to exit.
Read on to make sure that you’re ready to jump on the start-up rollercoaster…
1. Starting from scratch
“Launching our first ever website and understanding how things were done in the beginning was challenging at times because it was all very new. I had no experience setting up a company back then and it was extremely overwhelming at times; but my hunger and persistence was key in getting the business off the ground.”
“The first months of the business were certainly very stressful – we had a view on what numbers we needed to see early on to validate our theories about the business. Keeping focused on the numbers definitely helped prioritise what to work on during those months when pretty much everything on the site needed significant attention.”
“It was a big risk for both Dilshad (co-founder) and I to leave our respective lucrative careers and begin this joint venture. We literally started with zero revenues and spent the first six to nine months in start-up mode just trying to establish and build customer relationships in order to generate some revenue and get the business off the ground.”
2. Redundancies and firing
“Making people redundant is always difficult for any business but it is particularly difficult in a start-up because they are invariably people you have got to know really well and some will even be friends.”
“When the credit crunch hit in 2008, I had to lay off 12 staff in the space of six weeks. The leasing side of the business had only been going for just over a year, and we had grown quite quickly to a staff of 18. I remember when the first bank went bust and there was a run on Northern Rock. Our phones stopped ringing almost overnight. Thankfully, because I had a great non-executive director at the time who had encouraged me to create a risk matrix, we had a plan in place in case things went wrong.
“Unfortunately that meant losing 12 people to save six, and it was horrible. I had grown men crying in my office. I had to lose people who had left a job to come and work for me only three months earlier, and others who had just taken out a big mortgage.
“This wasn’t something that came easily and it is still very fresh in the memory. It was a really tough time, but it was also the time that shaped our strategy for the business we are today.”
Ciaron Dunne, Genie Ventures:
“The only thing in business that can be genuinely hard is dealing with difficult HR situations. It’s no fun telling a good person that you don’t need them anymore. These are real lives you’re dealing with, and people have real mortgages and real dependents. Nothing else in business is hard (in that sense); it’s mainly just a big game.”
3. Raising finance
“Investment decisions are far more subjective than anyone will admit to, and often have more to do with what’s on-trend in investment circles than actual business fundamentals. However we were lucky to get good people involved early and that has been huge help.”
“Raising funds through the Enterprise Investment Scheme (EIS) for a previous business and getting an AIM quote [were the hardest things I’ve done in business] – the amount was too small to interest most institutions whilst large for many private investors. Once we’d succeeded with that, further fundraising was much easier; investors did well.”
4. Achieving work/life balance
“Maintaining a balance in other areas of your life is probably the most difficult thing. There are times when you just about get the balance right, but whilst you continue to grow, this rarely lasts very long before the next challenge disrupts things all over again.”
5. Expanding your business
“Opening our first office in the US was [our toughest challenge]. We took on the biggest players in our market on their hometurf and it was a very difficult time for me and the company as it took a lot of energy and cash. Fortunately we succeeded and are now leading the way in the US and have secured some of the largest deals in the region over the past year.”
6. Remaining positive, even when things aren’t going to plan
“[The hardest challenge of all] was staying positive whilst the world was going completely mad all around us – austerity being the new growth! We have developed a policy of professional schizophrenia; protective reality when dealing with the now, and liberating dreaming and scheming when planning for what comes after the now. Some of that dreaming and scheming is now beginning to pay off so it’s exciting times!”
7. Adapting your business model or pivoting if your strategy isn’t working
“We realised the model we created for Time Etc in the early years wasn’t going to work for us in the long term and was slowly killing us. Having the courage to significantly change our entire business model a few years ago was extremely challenging but has been very rewarding. We’ve never looked back.”
8. And finally, moving on
“[The toughest thing is] selling a company you are truly in love with. It’s heartbreaking.”