Getting a business off the ground is difficult. You have to write your business plan, file your registration paperwork, secure funding and insurance coverage, market yourself and find your first customers – and then the hard work really begins.
The Bureau of Labor Statistics reports that just 50% of businesses with employees make it through their fifth year. If you want your business to succeed, you need to focus on business development.
CO— recently asked several entrepreneurs about the challenges they're facing as they attempt to grow and scale their businesses. Here are some of the most common obstacles they've encountered.
1. Capital
Financing is frequently cited as the biggest startup challenge among entrepreneurs, and, as our entrepreneurial panel confirmed, it continues to be a hurdle as companies grow.
C. Craig Lambert, president and founder of CCVRS, Inc., shared that he has invested "almost every dime [he] made" back into his business. Although it's hard to do, an entrepreneur must be willing to make their business a financial priority if they want to succeed.
"Most entrepreneurs are," Lambert said. "They are totally vested in their venture, and it can be quite scary at times."
Bootstrapping entrepreneurs like Jeff Sommers of Izzy's Ice Cream feel the capital crunch even more, especially when they're trying to keep up with competitors.
"It's always challenging to grow at pace with capital limitations," he said. "We're being really strategic about developing a program where we can … hit some of our objectives and hit the market running."
2. Manufacturing
For product-based businesses, it's critical to have the right manufacturer to create your prototype and initial line. If you're trying to scale up at a rate that exceeds your current manufacturer's capabilities, you may find yourself facing some difficulties in this area as you grow.
This has been the case for lingerie and loungewear company ThirdLove, which had been selling out of its popular bra sizes – and amassed a waitlist of 1.3 million customers for its June 2018 launch of 24 new sizes.
"[Manufacturing] continues to be a difficult problem that we're working on solving," said CEO David Spector.
3. Industry regulations
Every industry is regulated to some extent, but some have much tighter restrictions than others. Chelsea Cunningham, owner of The Title Girl, processes titles and registrations for local Texas automotive retailers. She wants to expand her services, but feels she's facing an uphill battle against what she describes as an "old school" industry.
"As far as what my industry does … it's very bureaucratic, with county-by-county [regulations]," Cunningham explained. "Coming over that hurdle is going to be the biggest challenge in succeeding nation wide."
4. Replicating your success in a new location
For many businesses that have thrived in their current city, the next natural stage of growth is expanding to new markets.
According to Jasmine Crowe, CEO of Atlanta-based food surplus management company Goodr, success here is all about "replicating what you've done in one city, in another city, and getting that same level of buy-in."
Like many business goals, accomplishing this is easier said than done. However, with the right market research, resources and roll-out strategy, you can learn from what went right at home and apply it to your next location.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.