Money Is Not the Only Challenge Startups Have To Overcome
by Simon Morris I am a freelance writer.Most startups agree that money is the most significant
challenge that they face and find most difficult to overcome. However, looking
deeply into the matter there are several other things that will come up down
the road as a challenge to them. Here are a few common challenges that many
startups face.
Remembering what Henry Ford said once, obstacles are dreadful
things but it only happen when you take your eyes off the goals, be it your
business or a 100-meter race in the Olympics.
There are several reasons why startups often lose their track
and are found to struggle running their business. When these reasons or
challenges take an unmanageable form, few startup businesses even die a
premature death.
On the other hand, most of the startups fail to achieve the
degree of success as desired by them and early. This is because most of them do
not anticipate these challenges and therefore are unaware of the ways to
respond and overcome these challenges by formulating an effective strategy.
The money issue
Out of the several common challenges that startups face money
seems to be the most significant one. It goes without saying that a lot of
money is required to runs a business. You will need money for:
·
An
office or a factory set up
·
Tools
and machinery, printers
·
Uninterrupted
supply of raw materials
·
Hiring
employees
·
Marketing
and sales and lots more.
Add to that, most of the businesses are not so lucky to have
steady cash flow in straight away from their sales. They may also not have
enough investors when their personal fund seems to be inadequate to run the
business.
In such situations, all businesses are bound to face troubles,
and in most of cases cash flow issues can hit a business really hard. It
will result in several consequences such as:
·
Delaying
in the roll-out of the produced goods
·
Facing
difficulty in hiring or retaining the key staff
·
Fitting
out any new office sand much more.
The need for money does not end here. You will also need
enough capital to fund research and development to produce better products, fund
software and others all of which will eventually account for the cash flows and the success of the business.
The last thing a startup expects, which unfortunately is the first thing most of them have to do, is cut back their cost of operation,
overhead expenses shed staff, reduce production just when they thought it to
be the right time to focus its energies for business expansion.
In such situations, there are few unwise startups that borrow
money from private individuals, banks and even look for debt reliefs from reliable sources and further fall into the debt trap.
In nine cases out of ten, these businesses can never come out of the debt hole
and have to roll down their shutters early and permanently.
Therefore, as a business owner and a leader, your primary job
is to manage both money and time proficiently so that you do not run out of any
of it if you want to succeed in your business and take it to the next level.
Lack of a proper plan
Lack of proper planning is another significant issue faced by
the startups. This may be due to the excitement involved in it or even due to
lack of foresightedness. However, with a proper plan in place businesses will
face a lot of problems such as:
·
In
sales and marketing aspects they will lag behind their competitors. They will
surely neglect it and therefore will not get the desired returns for their
business because they will not put enough resources into their marketing efforts
and sales.
·
These
businesses often rely entirely on the word of mouth marketing strategy which is
effective and essential but should not be the only one given today’s competitive
business world. If they are a SaaS, then these businesses have full faith in
their natural and over the time organic growth in sales without putting any
effort in sales and marketing.
·
These
businesses also put their faith in the false economy and believe that their
customers will automatically discover them and therefore do not make any
resolute effort to grow their business with a proper and well-structured business
plan to promote their brand and sales.
When you have a proper plan covering all the bases, you will
have all your money well spent. These key areas include:
·
Sales
and marketing
·
Business
and product development
·
Proper
staffing and retention of existing employees
·
Eliminating
chances of skills shortage and
·
Making
arrangements for funds to keep the business running at all times, high or low.
When you make a business plan you must surely focus on its
flexibility so that you can cope up with unexpected and undesired events such a
strike, shortage of raw materials, riots and natural interferences.
It is extremely vital for all businesses to have a proper and
tested contingency plan in place. Remember, a proper business plan is not all optimism
as it will not allow you to meet the surprises that you can bet with your life
is sure to come up some time or the other. If you do not have a contingency
plan, you are surely heading for unknown troubles that will soon shut down your
startup.
Therefore, make sure that you focus on all the details, no
matter how minor it is, and get this right.
Start with the right
people
Lastly, to ensure business success you must always find and
work with the right people whether it is an investor or your employees. This
means such people should have the following attributes:
·
Specific
skillset
·
Committed
to time and ethical practice
·
Zeal
to overcome severe bottlenecks
·
Prompt
to act
·
Play
the right role proficiently and
·
Have
the same mindset and high compatibility.
This is just the beginning. To make your startup a success
there is no substitute to hard work and not shortcuts either. This is something
business owners often forget and end up in failure.
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Created on Jul 26th 2019 01:12. Viewed 401 times.