It doesn’t matter how experienced or successful you are in your business—every entrepreneur can point to a time during which challenges may have gotten in the way of potential success. But whether a business setback was big or small, you weathered the storm and managed to get to the other side of it.
Now, going headfirst into the New Year, it’s time to not only reflect on the challenges you may have encountered last year—but also to turn them into major opportunities to grow and thrive going forward. Here are a few common challenges business owners face, with ways to turn those lemons into lemonade.
Scenario 1: Your “Next Big Thing” Didn’t Make a Splash
It’s painful to confront situations in which reality falls short of expectations, be it personally or professionally. Data from one study showed that only 40% of nearly 9,000 new products are still for sale three years after launch. If you launched a new product or service in 2019 that didn’t take off the way you had hoped for, you’ve experienced a common challenge among business owners.
As ego-bruising as it may be to admit that your big idea didn’t stick with customers, doing so is the first step toward nailing the next launch. In order to make a bigger impact next time you introduce a new product to your market, do the deep work of diving into the details behind why your previous effort didn’t pan out.
Your “post-mortem” should begin with the data. Focus on information about:
- Your product or service’s sales figures. How did these numbers compare to your highest- and lowest-grossing offerings? Could you have priced the product differently, or tested different price points, to affect your sales?
- How it was priced and positioned against both your own line and your competitors. Are there comparable products that customers are looking at? How were they priced compared to yours and in relation to the features you offered? What was your point of difference, and how did you communicate it?
- Who the target demographic was meant to be versus who reacted to it. Did you position your product correctly from a marketing standpoint to reach your intended audience? Which data did you use to zero in on your target market, and were there other sources you could have explored?
- Your launch timing. Did you strategically pick when you debuted, and were there factors you didn’t consider that might have drawn attention away from your launch?
- Its profit margins, and what your costs were that drove your margins down. Were there opportunities you missed, or questions you didn’t ask along the way?
Taking a good look at which parts of your launch sang while figuring out which others fell flat will be your first clue into identifying your opportunities going forward. You also may want to consider reaching out to experts, trusted colleagues, and even loyal customers for their honest opinions on what went wrong, or what they’d do differently next time around.
Scenario 2: Your Operating Budget Was Higher Than Expected
We all know the old adage that you have to spend money to make money. And although that’s often true, sometimes things don’t go exactly to plan and you end up simply spending—and far beyond what you’d anticipated and budgeted for. Some expenses are unavoidable, like emergency repairs, while others can be easier to identify, such as vendor price increases. And, sometimes, you simply make a miscalculation in your projections that ends up costing you.
No matter the scenario that pushed your operating expenses over the edge, this year, the opportunity is in getting a critical eye on your finances. This may mean handing over the reigns of your books by working with a bookkeeper whose primary goal will be keeping you on task and keeping you aware of what you’re spending. Or, if you already retain a bookkeeper, you might want to hire an accountant with a sense of your industry to dive deeper into your costs. There are larger factors that affect what you’re spending than what you know, which is where they can help significantly. You may also want to look into having additional financing like a line of credit available to tap into as you encounter costs in the coming year.
Think creatively, too. Sometimes it’s helpful to engage with business owners in your sector to take the pulse of the industry in general. Higher than expected costs might not be limited to your business, and your peers might be feeling the pinch, too. Forging relationships with competitors—paradoxical as it may sound—can also yield insights and prove beneficial for both parties.
Scenario 3: A New Hire Wasn’t a Company Fit
No matter how much time you spend on a hire, and how perfect you think they’ll be for a certain role, the reality is that you’ll never actually know whether someone is a fit until you get them in a chair. And that’s an expensive process: the Society for Human Resource Management estimated the cost of hiring a new employee of about $4,200, with about six weeks of time consumed by the search. The figure is a tough pill to swallow when you invest both time and money into a new hire, only for them to not work out for whatever reason.
But, there’s an opportunity to make sure the next hire you bring on will be right for your business. First, create a persona for your ideal candidate, much like you would for a customer profile. Candidate personas can help crystallize your ideas about what kind of employee you’d ideally want. By knowing what you really value in a hire, and what works in your company, you can assess how your real-world applicants stack up—and also evaluate what core values the candidates that didn’t work out have lacked.
As you go through the process to position yourself well for hiring in the New Year, remember that there’s no such thing as a perfect candidate. Knowing that alone will make hiring less challenging. Be flexible, determine what parts of your candidate are more important than others, and be open-minded to unique skills and attributes that may not have come to mind during this exercise.
As you dive into the New Year, understanding the reasons why you encountered past challenges can propel you forward, and set you up to capitalize on opportunities and promote growth.