At our small business startup workshop, The Right Foot, we have the privilege of chatting with budding business owners–entrepreneurs with a big idea, a big dream, and a big future. Many of them go on to launch. But some of them choose to hold off from starting a new business, feeling the time isn’t quite right yet.
We’ve collected some of the most common reasons our workshop attendees give us for waiting, and below we suggest some ways to hurdle these small business barriers and get your venture off the ground when the time is right.
How to Address the Top Six Reasons for not Starting a Small Business
- Lack of support from spouse/family network
Communication, communication, communication (from the start!) is the best way to help family members feel comfortable with–and hopefully excited about–your business idea. Because they know you well, they can shape your vision and give you honest feedback. And they should be well aware of the potential risks and rewards related to your venture. If your spouse isn’t on board with possible risks such as limited income initially, or using savings to start up the business, you may need to spend more time addressing contingency plans for meeting personal living expenses. Or you may need to revisit your business plan and facilitate additional communication until you can answer your family’s questions and reassure them.
- Intellectual Property barriers to entry
Protecting your original ideas, designs, and processes is critical to success. But patents can be expensive and difficult to obtain. Research whether your intellectual property can be safeguarded by copyrights and trademarks, which are less cumbersome to obtain yet also provide a variety of protections.
- Insufficient collateral to securitize loan
For many entrepreneurs, gaining access to financing is a gateway to starting a small business. Without sufficient collateral, you may not be able to close a loan of the size needed to fund your launch. If you have the option, the bank may accept a cosigner for the loan, with sufficient collateral, who is willing to be liable in the case of default. A small number of lenders also offer “no collateral” loan programs. Prepare to secure a loan with these eight steps to land a small business loan.
- Lack of industry experience or technical skills
Perhaps your entrepreneurial cart got before the horse, and you got very excited about starting a business in an area you don’t have significant practical knowledge of. We don’t recommend jumping into a venture without significant preparation, but all is not lost! Many future small business owners go spend time working in the industry to gain the skills and inside knowledge they need while refining their plan. For industry experience, you could invite an industry expert to join your advisory board. The danger in bringing on outside experts as employees or board members is that, without the skill or knowledge needed to run the business and understand the product or service, a business owner could lose credibility within the industry or even with their own employees. Worse yet, if the employees quit, the entire business may fold. We recommend having a solid base of knowledge and skills in the area of your business prior to launch.
- Saturated market
If you have a business idea but your market research indicates many other entrepreneurs have started similar businesses that meet similar needs, this is a strong signal to modify your business proposition. Perhaps there’s a niche within the market that no one else is serving. Or you may need to scrap your original idea and generate ideas in a completely different area. Still set on jumping in with your original idea? Gain an immediate presence in the market with existing customers, cash flow and brand identity by acquiring one of your competitors.
- Can’t find the right location
While less relevant for online businesses or service-based businesses, vehicular and foot traffic can make or break it for a retail business. The success of a location can be impacted by customer convenience, parking, highway access, complementary service providers, and even loading docks. For non-retail businesses who have special requirements for size, such as some light industrial or manufacturing businesses, consider subletting from larger facilities with surplus space. Overall, it’s worth being patient for the optimal location, so consider reaching out to nearby city employees, real estate agents, and industry colleagues–you never know who might have a lead on the perfect spot.
Surmounting a few of these barriers is a great way to prepare to be a small business owner! If you’ve attended The Right Foot business startup workshop and still aren’t sure how to navigate a small business obstacle, our no-cost, one-on-one business counseling can help you get a great start.