“We were faced with the reckoning: Will this project we’ve been working on for so long ever see the light of day? To understand that I put in so much, but is it enough? And will it ever be enough?” Maneesh Goyal recalls about overcoming the challenges of opening Indian restaurant SONA during the pandemic, during a recent Forbes panel.
While what Goyal describes are feelings almost any entrepreneur can relate to when starting a business, entrepreneurs are facing challenges that are exacerbated by the pandemic. Goyal persevered through the uncertainty and opened his restaurant, which he partnered on with Priyanka Chopra Jonas, and it has since become a celebrity favorite.
“To really turn what was an idea that was very much in shambles a year ago — to see it flourish — that’s the journey,” he says.
4 new challenges of entrepreneurship
We spoke with daring business owners like Goyal to hear about the challenges of entrepreneurship they’ve faced over the past year and the solutions that are helping them overcome them. Here’s what we learned.
Challenge 1: Facing financial uncertainty
Solution: Get resourceful, take care of your business credit, and play the long game.
“Inflation is hitting marketplaces that are not just in hospitality, but across the board,” says Goyal. “Budgets that were built in 2019 when I started to fundraise are no longer applicable.”
Goyal had quickly realized that he needed to raise more capital than expected in order to be successful. “This is the reality of being an entrepreneur today in 2021,” he says.
So he turned to the SBA for a loan. “The SBA has products built for small businesses that are not just the PPP and EIDL — there’s a suite of products beyond those that I’ve also tapped into,” he says.
Fundraising is crucial for many businesses to launch and scale, but it’s important to plan ahead before getting to that stage. Timing is everything.
“The best time to actually go out and raise money is when you don’t need it,” recommends chef and entrepreneur Tom Colicchio, owner of Crafted Hospitality. One of Colicchio’s investments, Made In, a direct-to-consumer cookware company, raised money before they had an immediate need. “They didn’t really need it, they had great cash flow, but they were able to set great terms,” says Colicchio.
If you’re managing your debt and your business is in a good place, you have leverage to compound that success. For example, you can refinance with better terms, negotiate for better credit card terms, or outright reinvest in your business for future success rather than focusing on keeping the lights on.
Additionally, think about where it makes the most sense to reinvest.
“Know where to be scrappy and know where to invest,” advises Avani Modi Sarkar, the founder of Modi Toys, a DTC multicultural toy company. “Legal — that’s something you don’t want to DIY. Definitely hire professionals where needed and learn how to be really scrappy when funds are not available,” says Sarkar.
You don’t need to have a ton of resources off the bat to start a business — as long as you have good credit, which takes time to build.
“Credit matters,” Chace Infinite, musician and founder of Harun Coffee Shop, shared at a “Future of Retail” panel at CultureCon, a gathering for entrepreneurial-minded Black and LatinX creatives. “Being young I never understood the value of credit. A lot of the time, it was the resources that prevented me from following through with my vision.” However, with the right credit, entrepreneurs like Infinite can tap into financial products designed to propel business growth.
“There’s a way to manufacture those resources without having the money these days,” he says. “Early in my entrepreneurship journey I learned the value of credit. And it saved me.”
Challenge 2: Recruiting a diverse and talented team
Solution: Try out unconventional hiring practices and mentor new talent.
“You don’t realize whenever you get into the business how time-consuming it is,” says Krista Abel, co-owner of Dream Home Images, a luxury real estate and architectural marketing firm located in Northern California. As the business she runs with her husband, Greg Hansen, began to grow, Abel realized she also needed to grow her team.
As one of the few women in a male-dominated industry, Abel recalls being passed over time and again for opportunities. For her and Hansen, it’s important that they provide such opportunities for other marginalized groups. Not only does that bring more creativity and diverse thinking to the team, but it also helps them find unrealized talent.
“Krista and I both grew up without the most money. We want to be the people that can reach out and help other people,” Hansen explains. “And as entrepreneurs, I didn’t know that’s what I really wanted until I was in the position,” he says. “It’s really about representing our company as it reflects the country,” adds Abel.
The duo goes beyond standard recruiting procedures, and instead have conversations with people in local coffee shops and look for passion and willingness to learn more than experience.
“I can hire the most fancy architectural photographer in the country, but I’d rather hire somebody with heart who’s really passionate about what they do and try to train the skills and show them the way,” Abel says. This not only helps them hire employees more quickly, but it also increases retention since their employees are building careers with them.
Challenge 3: Retaining employees as labor patterns shift
Solution: Reward the team and find ways to help them grow.
Employee retention is one of the biggest hurdles all kinds of businesses face right now. For chef Tom Colicchio, the tight labor market has amplified his belief in how important it is to create a work environment where people feel respected and valued.
“Too often I find that entrepreneurs just get into the weeds and they’re so focused on their business that they forget it’s the people who we employ who actually make it,” he said on a recent Forbes panel about overcoming obstacles. “No one makes it on their own.”
Both Colicchio and Dream Home Images owners Abel and Hansen say finding opportunities to help their teams consistently learn and grow is key for retention.
Additionally, Abel and Hansen say they ensure that their team’s pay is not only fair, but competitive. When there’s money in the bank, they are thinking about how to compensate employees and how to reinvest in gear and tools that make their employees’ work more enjoyable. “Because without the team, we would fail,” Abel says.
Providing competitive pay also gives employees the freedom to perform their best work. “If I can hire the right person at a livable wage, they’re going to perform their heart out,” explains Abel. “They get to do work that they enjoy, that they know is appreciated, and they don’t have to worry about how they are going to take care of their families.”
Challenge 4: Keeping up with changes in customer behavior
Solution: Start with lightweight solutions you can add to as your business grows.
“When the pandemic hit, there were so many businesses that quickly needed to pivot to eCommerce,” explains Naomi Wheeless, the Global Head of Customer Success at Square. While change wasn’t easy, 88% of retailers surveyed for Square’s Future of Retail report say that they are now selling online.
“You can’t just rely on one avenue anymore. You have to figure out how to meet your customers where they are,” she advises. That may mean opening an online store, selling on social media, or offering the ability for customers to order from anywhere and get their items delivered.
“The beauty of the internet is that you can sell to anyone,” says Recho Omondi, designer and host of the Cutting Room Floor podcast, during the “Future of Retail” panel at CultureCon. “Whereas before you needed media [coverage] to get into the retailers, all of that changed. The paradigm has shifted in the sense that if you have Square, you can sell your goods,” she says.
“If you play your cards right and have something unique to say, you can build your own audience and get things to your customers.”
While going online does take some work, it’s a surmountable task that has an immense benefit — and it starts with taking things one step at a time, according to Wheeless. “The idea is to really just start with one thing. Set up your inventory online with Square, digitize your menus, or offer curbside pickup. Master that one thing and continue to layer on that by adding additional offerings,” she advises.
Overcoming challenges as an entrepreneur is part of the job description. But believing that you can do this, and scanning for the solutions to get you there, is what has helped these business owners achieve their goals.
Sarkar, the founder of Modi Toys, had to find the motivation within herself to believe that she could actually start her own business. And her drive and entrepreneurial mindset is what enabled Sarkar to overcome the obstacles in front of her as she became an entrepreneur for the first time.
“I think entrepreneurship chose me,” she says. “I had a choice to make when I was at that crossroads in life, and figure out whether I should go back to corporate America or really just take a bet on myself. If anyone else can figure it out, why not me?”
Square has the tools to run your business — on your own terms. To help celebrate businesses paving their way forward, we partnered with Forbes on the Next 1000 initiative to spotlight bold entrepreneurs and share their most valuable lessons. By sharing firsthand experiences, we’re helping businesses celebrate resilience, build skills, and explore what’s next. See how Square works, and get more expert guidance for the next era of small business.