Friday, February 28, 2014

The Top 3 Challenges of Entrepreneurship Startups

The challenges of entrepreneurship startups are inherent in the definition of the word entrepreneur: one who organizes a business venture and assumes all the risk. The risk lies in whether or not the entrepreneur overcomes a host of struggles. 
According to a survey by, here are the three most common struggles that business founders must overcome to secure their position at the helm of a successful business:

Retaining customers As an entrepreneur you can be so focused on increasing your customer base that you fail to tend to the care and feeding of the customers you already have. Some facts bearing on this struggle:
  • It is 50 percent easier to get repeat sales than to get new customers.
  • Just a 5 percent increase in retaining your customers can increase your profitability by 75 percent.
  • A whopping 80 percent of your company’s future income will come from only 20 percent of your existing customers.
Nurturing leads and eliciting responses can be problematical To wit, entrepreneurs reported that:
  • They achieved a scant 24 percent response/acknowledgement rate within the first five minutes.
  • Around 40 percent of the business leads responded within four hours.
  • Over one third (36 percent) never responded within two weeks.
  • Fully three-quarters of the businesses responding to the survey gave up after two unsuccessful attempts to contact a potential customer.
Obtaining credit has become more difficult for entrepreneurs. During the latest survey year, although 60 percent responded that their credit applications were always approved, the 23 percent who reported that credit was always denied cited these principal reasons for denial:
  • Banks underwent much tighter restrictions on lending: 91%
  • Applicant had insufficient collateral: 39%
  • Applicant had an unfavorable personal credit history: 37%
  • The business itself had a disqualifying credit history: 29%
  • The requested loan was too large: 17%
So, along with all the other obstacles out there -- government regulation, liability and taxes, etc. -- the challenges facing today’s entrepreneur are daunting. Add the suffix -ship to entrepreneur and the notion of the entrepreneur being the captain of his or her ship -- being one’s own boss -- is what it’s all about, but watch for the rocks and shoals, skipper.

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