5 Problems You Will Face When Starting a Business, and How to Deal with Them

Becoming a successful business person is a long and winding journey. You’ll be facing various challenges along the way. That’s why it requires great patience, hard work, persistence and a lot of lessons learned to achieve your ultimate business goal. But did you know that most of these difficult challenges will try to knock you out right at the start of your business?

If it’s your first time to start a business, never expect that it would be easy, fun and like a dream come true. To avoid tasting failure at the early stage of your business, you have to anticipate the worst scenarios that could happen to you so you can be ready to overcome them.

Here are 5 problems you should be prepared of when starting a business in the Philippines, and some tips on how to deal with them:

1. The tedious steps of business registration, taxation and compliance

Don’t expect a breeze in getting certificates of business registration or licenses from the different agencies of the government. If you’re in the province, expect one to three months of processing time from getting your business trade name (SEC or DTI certificate of registration) to the completion of the printing of your official receipts or invoices. Just before the year ended last year, I had finally registered my digital marketing agency business in Tacloban City as a corporation. It took me a month to prepare the corporate documents and secure the SEC registration in Cebu City, another 3 weeks to get the BIR certificate of registration, and another 3 weeks for the Mayor’s business permit.

How to deal with it?
If you don’t have any idea or experience in business registration and processing, I advise that you hire someone to do this for you. Of course it will cost you money but at least it would save your precious time. You may hire an accountant or bookkeeper to outsource tasks, such as DTI or SEC registration, BIR registration and getting Mayor’s permit.

If you want your business to go smoothly, it’s wise to financially prepare to cover all the expenses you will incur in registering your business. Furthermore, have planning and timing. Start registering your business earlier rather than registering it a week or a month before you plan to start your operation. Remember that aside from the long processes of business registration, the printing of your official receipts or invoices will also take time.

2. The challenge of finding the right team for your business

Having the right people in your business is vital to your success. But don’t expect that they will come to you magically and beg that you accept them as part of your team. Don’t anticipate that once you announce your hiring, worthy applicants will immediately rush to your office to win whatever position is available in your company. Even if you will receive a lot of applications, choosing the most deserving people to be part of your team could be quite challenging. If you’re hurrying to hire employees to start your business, chances are, you’ll end up hiring the wrong people for your team.

How to deal with it?
Well, it takes time, patience and a lot of scouting to find the right team for your business. Your human resource management should be part of your business plan, and your initial team or employees should already be ready before your business starts operating. To have that preparedness, start your recruitment and hiring process earlier. You can also utilize social networks, like LinkedIn.com and even Facebook to scout and recruit people who are deserving for your business. Moreover, don’t hesitate to ask your most trusted people (your family and friends) who are professionally eligible to work in your company to help you start your business well.

3. The difficulty of finding your first customers

So you think you have an awesome product or a service. But unfortunately, when you start your business and put your product on the market for sale, the crowd of customers you were expecting did not come to buy anything from you. That scenario is truly disappointing. But don’t worry because you’re not alone. A lot of entrepreneurs and first-time business owners also experience that frustrating condition.

How to deal with it?
Have a marketing plan or strategy. Identify your target customers and execute the right marketing campaigns and tactics before starting your business and offering products to potential customers. Also, before starting to sell, spy and identify your competitors first. You might have an awesome products, but if you’re not aware that your competitors are selling more awesome products than yours, your business is in big trouble. Therefore, create a strategic marketing plan, do a competitive research, segment or target your market, and sell at the right time.

4. The problem with your cash flow

Many businesses are born like human babies – small, delicate and financially unstable. With the expensive cost of business licensing in the Philippines, micro business owners and entrepreneurs who want to religiously comply with all the government’s requirements might find themselves in cash shortage. Add that to the fact that sales and profit aren’t immediately earned at the start of a business and there are fixed expenses that must be paid such as wages, office rent and utilities… the result would be a big trouble for business owners.

How to deal with it?
Financial plan must be included in your overall business plan. You have to anticipate and estimate all the expenses your business will incur. And that is without expecting revenues in the early and crucial period of your business (for example, in your first year where you’re still struggling to find customers and generate profit). You should also see to it that you have a financial backup to cover your regular and extra expenses. If your business capital will come from a loan or debt, make sure that its terms (interest rate and mode of payment) will not give you future problems.

5. The person in you who might give up any time soon

The biggest problem you will encounter when starting a business might not be money, tax or debt. The worst problem you would face is none other than yourself. The “weak you” will tell you to surrender when hard times come or when the problems above get even worse. The “feeble and impatient you” will always whisper in your ears to stop continuing your business and give up on your dream. You will suffer frustrations, hopelessness and loss of self esteem.

How to deal with it?
Your business development will depend on your personal development. If you’re not personally (mentally and emotionally) prepared to handle a business, you might find doing business too much for you to handle. To prepare, have knowledge, wisdom and understanding about all the challenges waiting for you in your journey as a business person. Acquire new skills that will give you the edge to succeed in the middle of hardships. Develop patience, self-discipline, hard work, persistence and other great virtues to overcome your worst “you”.

I also recommend that you surround yourself with dynamic, inspiring, motivating and helpful people like your friends, family and mentors so you can have some people who will cheer you up, support you, and actually help you when you’re down and feeling hopeless.

Remember that starting a business is tough, and it’s only the beginning. If you want to be a truly successful entrepreneur, you should not just dream to have a business, but you should plan to have a successful enterprise with happy employees, satisfied customers and of course with high financial performance and stable financial position. In other words, it’s indeed a long and winding journey. So you better be prepared… be truly prepared.