Problem Solving 101

How to Handle Your Business Issues with the Most Efficiency and the Least Stress

Learn how to develop your critical thinking skills so you will be able to overcome any problem that may arise when starting a business.


Problem-solving is a business skill that often takes time and experience to learn to do effectively – this is just a beginners’ guide on how to structure that process. AMI’s Consultants have robust experience in solving problems, and are willing to help!


To work with us 1:1 to solve your most pressing business problems, send us an email at consulting@azmicrocredit.org or schedule a free appointment at www.azmicrocredit.org.


This guide has been published by Arizona Microcredit Initiative, 501(c)(3), an Arizona-based nonprofit organization dedicated to supporting underserved entrepreneurs in the Phoenix area through microlending, consulting, and education services. Visit our website to learn more!


An Introduction to Business Problems


You probably don’t need anyone to explain what a business problem is – you deal with them daily and have a much better understanding of where they come from, how serious they are, and, to a degree, how to solve them. The purpose of this document is to provide you, the prospective or current entrepreneur / small business owner, with tools to structure your thinking about problems so that 1.) you can more smoothly tackle them yourself and 2.) train others on your team who aren’t as involved as you to solve problems on their own.


Business problems arise in all sizes and in all aspects of business. Here are a very select few, but the ones you might encounter may be much larger or smaller in size, scope, and importance to your business. This is just a list of examples:

  • My sales this month have been lower than usual

  • The supplier is planning on hiking his prices, which will lower my margins

  • The landlord is planning on increasing rent

  • There's a new competitor opening soon nearby

  • Some customers left negative reviews about my business

The fact is, there’s no want for business problems in entrepreneurship. Real, practical, and impactful solutions, though, are much rarer. We at the Arizona Microcredit Initiative can’t guarantee that this guide will lead to the perfect solution to all your problems, but what it can do is give you the tools to maximize your chances that you do find it.


The process of identifying a problem could be called problem discovery – it’s the realization that there’s a gap between the businesses’ perfect condition (its ideal state) and where the business is now (its current state). To put it simply, business problem solving is the process of bridging the gap between those two.


The Stages of Problem Solving


Problem-solving can be thought of as a cycle with five distinct steps, the first of which we’re already familiar with – problem discovery. It’s where we identify what exactly the problem is. The other stages are developing a hypothesis, framing your thinking, research & analysis, and generating solutions. Below is how we at AMI visualize problems that we solve for entrepreneurs.


It’s important to remember that problem solving is cyclical – you’ll never run out of problems to solve, but they should be tackled one at a time. You may have heard the saying “smooth is fast, fast is smooth” – that applies to problem-solving, too. Tackle one at a time, and more problems are likely to be solved that way.


The Stages Explained


Step 1: Problem Discovery


This is the stage in which problems should be identified. Some tips we have for stating your problem are the following:

Pick exactly one problem – it’s easy to combine two or three into one, but solving that many at once is more complex

Identify the source of the problem – where is it coming from? Who or what is causing it? This can help identify stakeholders

Know your timeline – some problems you have months solve, some just weeks, and for others you may have just days. Understanding the timeline can help save your efforts in terms of finding a usable solution


Step 2: Formulate a Hypothesis


This stage feels more academic than it really is. What we’re really doing here is making a claim that we can test about the problem that has been identified.