Starting a business is never easy. In fact, startup companies will often wind up in the first few years in business. Given the limited resources, new startups will face tremendous challenges from the big companies who have established themselves for many years.

In the initial startup phase, entrepreneurs often have to work alone. Normally, the entrepreneur will also not have a proper office. To lower the cost of new startups and encourage entreprenership in Singapore, the government has also introduced the Home office scheme few years back.

There are a number of common challenges that entrepreneurs may have to face in their business venture. These include:

1) Limitation in financial resources

This is often a number 1 challenge for new businesses. Startup without strong competitive advantages such as exceptional business model, unique technologies or products will most likely not able to receive a lot of support and funding from investors.

2) Limited contacts, partnership & networking

Its unlikely that other corporations will consider partnering new businesses. So, its always a struggle for new startups to establish themselves in the marketplace. Business partnering is about relationship building. And it takes time to build trust with partners for any form of business cooperation.

3) Limited customers, low sales volume

It requires intensive marketing effort for your business to gain exposure, especially now that we live in the information age. This is also one of the main reasons why some online businesses are doing well, while others receive less than 100 visitors every month. You should allocate a reasonable amount of budget on marketing your products or services. Nowadays, marketing may not bring you desirable result though. The best form of marketing still goes back to word of mouth. Referrals and repeat business is always more effective than any form of advertising.

There are of course many other challenges that entrepreneurs may face. Examples include family objections, unrealistic business models etc. It will take a lot of hardwork and determination to succeed.

There is no easy way to establish a profitable business. If it is, I can only say that it will be easy for any others to start a similar business too. They will become your major competitors sooner or later.

Article by Byon Ong, Singapore Business Resources for Entrepreneurs

January 2006

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