Starting your own business in no less than a dream for many of us. The humble beginnings and the ultimate success of companies like Amazon and Facebook fuel the flames in the hearts of many aspiring entrepreneurs. But starting your own business is no walk in the park. In fact, according to a recent study, only 10% of all startups are successful with only 33% of these surviving up to the 10-year mark.
But despite the odds, in the end our desire to become a part of these lucky few companies is what drives us to work hard to achieve eventual success. Almost all the startups face similar challenges and trials during their early days. Let’s take a look at some of these hurdles that must be dealt with on the way to startup success:
Undeveloped Business Plan
A thorough business plan is the foundation stone of any successful startup. Most entrepreneurs make the mistake of starting out without having a proper plan. An under developed business plan can lead to shortcomings and problems from the start, which can lead to eventual failure of the entire startup.
According to Benjamin Franklin, “By failing to prepare, you are preparing to fail”. A easy method to overcome this hurdle is to work on your business plan thoroughly before stepping out in the market, to pinpoint and overcome any shortcomings that are expected. Once you go live with an actionable business plan, don’t forget to regularly review and update it to keep up with the market trends.
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Skill Gap of Entrepreneur
A business cannot be run on sheer will alone. You will be needing multiple skills and abilities, some of which might be different from your current knowledge and skill-set. This is especially true for tech startups since entrepreneurs are not familiar with the outbound marketing and finance aspects of industry. About 75% of venture backed startups fail due to lack of knowledge and skills.
However, this hurdle can be easily negotiated by the entrepreneur if he invests his time in learning about areas they lag in like sales, finance and accounts. By getting valuable training, you can become the multi-role figure that can lead the startup to success.
The vision and ideology of the business is collective must be shared by all employees as human resource is the immense asset of any company. Inexperienced and inappropriate staff can cause disruption, unforeseen challenges, and overall loss in productivity. This also includes employees that have no passion for the company’s goals and vision.
A simple solution to overcome this problem is to hire an experienced HR Manager. These individuals are experts at finding like-minded and passionate individuals whose priorities match your startup. This creates a balanced, productive, and encouraging atmosphere as well.
Ignored Competitor Research
They don’t give much attention to their market competitors. New startups consider them as a stepping stone on their way to success, but in reality, these competitors are battle-hardened and have enough experience to expel you from the race with ease.
Now the best way to deal with this hurdle is to use the competition to strengthen your own business strategy. Do a complete market research about the rates that your competitors are using and go for better and economical pricing. Adopt better strategies than your competitors. These simple techniques can be a game changer in a competitive market.
Even if you already have required funding to kick start your business, it’s not going to succeed if you cannot turn in a profit. If proper measures are not adopted, financial mismanagement can turn into complete catastrophe for the startup.
A simple solution to this issue is to incorporate cash flow forecasts to predict annual profit and loss relationship. These models predict the profit ratio pertinent to predicted sales. Appropriate financial management strategies should then be put into action to overcome any problems in marketing. This ensures a balance between profit and loss, further increasing your chances of success.
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Managing time efficiently is important for any startup. During early days, businesses have to perform multiple tasks and manage multiple projects at once. This is actually more hectic than it seems as all the due tasks get piled up. This can affect the productivity of your business negatively and turn out to be major disadvantage for emerging startups.
This problem can easily be avoided by preparing and following a proper schedule. The tasks can be divided according to their priority and importance. Moreover, weekly and monthly goals should be set to encourage active participation from the employees.
Expanding too Fast
Most startups that pass the initial profit margin, immediately start to plan on expansion. Regional expansion is a very crucial stage and a lot of planning and funding is required to make this a profitable decision for the business. Unfortunately, immediate rush to this stage without the required resources and planning can and will end in disaster.
This hurdle does not present itself the same way for different businesses and should be dealt with in a different manner. Always make sure you have adequate finances in case of crisis and always have backup content for the market. Ensure proper plans for the current market before moving on to the next frontier and always remember, “Slow and steady wins the race”.
Starting your own business is fun, There are lots of risks involved and a lot of hurdles to be faced. These must be dealt with for a business to be self-sufficient and sustainable.