Entrepreneurs have the ability to make a difference in the world, help others succeed, and ultimately leave a legacy of success. However, there are challenges that entrepreneurs face that most people do not. They must deal with bureaucracy, lack of funding, exorbitant startup costs, and repeated delays. In this article, we will discuss a few of the challenges that entrepreneurs face in starting and operating their own business.
Entrepreneurs are often overworked at the beginning of their business. They face the challenge of juggling many jobs including customer service, marketing, executive, accountants, lawyers, tax specialists, accountants, legal counsel, and bookkeepers. One entrepreneur we spoke with was responsible for more than fifty jobs, all at once. Another was managing fifty employees, and he was also the publisher for his small publishing company. It was common for entrepreneurs to have twenty or more people working for them at one time.
The size of a small company also makes it harder to raise money. Private funding is harder to come by. Small companies do not have access to wealthy individuals or corporations to fund their businesses. Even if an entrepreneur does raise capital, many banks will not lend money to start-up businesses because they are too risk-averse.
Entrepreneurs have to factor in start-up costs into their budget because they cannot easily “cut” costs later on. There are often payroll taxes, business licenses, energy costs, utilities, IT equipment, furniture, office supplies, and overheads. They have to pay for rent, utilities, electricity, water, and telephone. In some cases, they may have to raise funds in order to pay for these costs in the first place.
Most entrepreneurs will be concerned about learning the ropes of owning and operating a new business. It is difficult for people who have been in an existing job for many years to jump into the world of entrepreneurship without any experience or training. While some entrepreneur mentors have been successful in meeting with entrepreneurs and training them on how to run their business, not every entrepreneur will be able to spend an hour a day learning how to be a business owner.
When a new entrepreneur sets up a shop, he may find himself facing problems related to tax relief opportunities. Entrepreneurs must understand and apply the rules on what they can and cannot deduct from their income. There are many exceptions to the rules, so an entrepreneur needs to be sure to follow all the rules. Most entrepreneurs have businesses in which they hold themselves as owners and are not currently renting space from someone else. When there is rental income in a year, it is tax-free because it is based on the square footage and not the actual value of the property.
For business owners, determining if a personal property such as jewelry or home improvements qualifies for capital gains tax relief is also a concern. Under the tax code, personal belongings may be eligible for business deductions. Certain investments may also qualify for tax relief. If a business has capital goods that are personal property that is not for sale, these can qualify for capital gains relief.
An important part of being a successful entrepreneur is setting up an effective succession plan. If an entrepreneur becomes ill or has a serious illness, it is imperative that a succession plan is in place. Because it is difficult to predict when an entrepreneur will be unable to work, there should be at least one individual designated to fill in for the entrepreneur when he or she is unable to work.
An entrepreneur must consider how their business will be taxed when it is time to sell the business. Taxes are not written in stone and can change at any time. The entrepreneur must be aware of changes to their taxes at all times. Once a business is sold, it is up to the seller to file the appropriate tax forms. This can be challenging because it is the owner’s responsibility to keep accurate records of the business. An entrepreneur’s business will have some business owners who will operate in the same manner as they started the business. There will be some entrepreneurs who have hired other people to help with the operations and those with the same vision, even if they have had the same business, for many years. In many cases, it is the loyalists who can best pass on the business to their children.