Most Common Challenges for New Startups
Entrepreneurs face common challenges when starting up a business and trying to get it off of the ground. To help you prepare your strategy, here is a look at the greatest struggles faced by entrepreneurs.
Top 6 Challenges
1. More than half of businesses suffer from slow or lost sales.
2. A quarter of businesses face unpredictability issues in business conditions.
3. Less than 15 percent have customers not making payments or paying late.
4. Less than 10 percent deal with falling real estate value.
5. Five percent or less suffer from the inability to obtain credit.
6. Two percent have issues with the cost or terms of credit.
Many entrepreneurs become so focused on creating new customers that they fail to address a strategy for retaining customers they already have. Did you know that it is twice as easy to sell to existing customers then sell to brand new customers? Existing customers also create a dramatic affect to your bottom line. A small five percent increase in customer retention will increase your profitability by 75%. 80% of your company’s future revenue will come from just 20% of existing customers.
Most small businesses struggle with responding to potential leads. Leads are seeking a response or acknowledgement within five minutes of their submission. Only a quarter of businesses respond within that timeframe. 40% of businesses respond within 4 hours while an additional 36% never respond to lead within a two week period. Following up with leads remain an extremely low priority for small businesses. 75% of businesses had only two attempts to contact a potential lead before the rep gave up.
A fifth of business owners say they didn’t apply for funding for fear of their application getting denied. Statistically almost 70% of applicants are always approved. Less than a quarter are denied. The main reasons for denial are tighter restrictions on lending by banks, insufficient collateral, personal credit history, business credit history, or to large of a loan.
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