10 Of The Biggest Challenges Start-Up Companies Face
Starting your own business is something which takes lot of bravery and confidence, as there is a risk which is presented where the business may not be as successful as initially intended. Once starting a business, many business owners find themselves faced with many challenges, as it is a level higher than working a standard 9-5 job, and full responsibility lies with the business owner/s.
The challenges of running your own business can vary and can be looked at from many different perspectives. Here we list the 10 biggest challenges start-up companies are faced with, and solutions on how to overcome these challenges.
1. Fierce Competition
The corporate world is quite fierce. There is always a competition going on between the giants. Competition poses one of the biggest challenges for the survival of startup businesses. And if you have an online business startup, the competition gets tougher.
The competitive environment keeps the startups on their toes, as there is no margin of error available. Both B2B and B2C organizations always tend to feel the heat of the fierce competition.
Solution: In order to survive in this competitive business environment that covers both traditional and online businesses, the startups need to play aggressively, and punch above their weight to gain the much needed recognition amongst the clusters of ever challenging and expanding businesses.
2. Unrealistic Expectations
Success does not come alone. It brings expectations with it. Most of the times, these expectations seem realistic, But in the real sense of the word, are merely unrealistic. This same concept holds true for young startups.
Startups tend to face challenges when they set ‘unrealistic expectations’ following a booming success. Remember, success is short-lived and expectations never end. This is where startups need to translate what the real expectations are? Sustainability is the name of the game. And sustainability requires consistent efforts.
Solution: In order to succeed in a competitive business world, startups need to have high but controlled expectations, keeping view of the resources available, the extent of growth potential, and other market factors as well.
3. Your Comfort Zone
Growing a startup can feel like taking one step backwards for every two steps forward. It takes grit.
At the beginning, you’re going to need to wear a lot of different hats (metaphorically speaking, at least). And you’re going to have to push yourself to go outside your comfort zone on a regular basis.
So what are you willing to take on? Are you prepared to put in the hard yards to make your startup thrive? Can you make a convincing pitch to potential investors when you need funding, for example?
And just as importantly: is there anything that’s non-negotiable for you? Anything that you do not, under any circumstances, want to do?
Figuring out your comfort zone early means you can make provisions for this if you need to, so you can find team members who are comfortable doing the things that make you uncomfortable.
Solution: One of the things which I've found has helped me step out of my comfort zones is to take things step-by-step, one day at a time. I don't believe you have to take drastic measures to step out of your comfort zone, but stretching it just a little bit can be extremely beneficial.
If you have major tasks or projects to work on which you know are likely to a huge step out of your comfort zone, think of ways in which these can be broken down into smaller daily tasks. This makes the overall task seem achievable, and you'll find you take a lot of pressure and stress off yourself in doing this. You may also be surprised in how quickly you can get big projects from taking things step-by-step, one day at a time.
4. Lack Of A Proper Marketing Strategy
It is always a challenge for startups to figure out best ways to market their products or services. The fact that small businesses need to maximise their return on investment with efficient and result oriented targeted marketing also makes them vulnerable in terms of trust they have developed vis-à-vis customers. Without putting a comprehensive marketing strategy in place, companies’ profits take a steep plunge.
Solution: Today’s digital technology has opened a broad spectrum of avenues for marketing in the form of electronic, print, online, mobile, and video advertising. Startups more than ever need to be adept at creating innovative marketing plans, placing advertisements, and letting people know the worth of their products or services. To put it simply, a good marketing strategy has vision, mission, and business goals. It should be able to explain the position and role of a business’s products or services in the market. Proper marketing strategy fundamentally entails efficiency with which customers are approached and encouraged their future loyalty towards the product or service. Technology giant Apple Inc. is successful because of its unique marketing strategy that makes its products user friendly and highly intuitive. Steve Jobs had the vision that people will not use Apple’s products, they will experience them.
Before starting a business, you need to have a clear understanding of who your product or service is targeted at, how you are going to reach out to them and how your target audience will benefit from your service. Some of the most successful companies have built an empire by focusing on a niche market. As a business, your product not not have to meet the needs of every type of niche - some start-ups make the mistake of trying to please everyone, and then end up pleasing no one. Your product or service has to fill a gap in a specific market where it can solve a problem for a particular niche.
5. Time Management
In startups as in life, there’s never enough time. There are a million and one decisions to be made and only 24 hours in a day.
So start by eliminating or minimising distractions — anything that gets in the way of running your business.
Solution: Focus your time and energy on the most impactful things. Ask yourself: what is important and what can be postponed until tomorrow? What is stopping your company growing? Those are the answers you should deal with today.
And when you’re trying to set priorities, borrow a tip from former Olympic athlete Ben Hunts-Davis and ask yourself: will this make the boat go faster?
That is to say, will this decision or action have significant, measurable, positive results that will help you hit your targets? Or is it just a “nice to have” that you can add later?
Cut the noise and focus on things that move the needle (or the boat).
6. Finding The Right People
Certain skills are crucial not only for your business to survive, but also for it to grow. Knowing the exact skills you need — and how to get those essential people on board — might be the determining factor in how well your startup thrives.
Delays in finding the right personnel are costly. For a small team, the recruitment process eats up valuable time that could be spent on other areas of the business, but on the other hand, not having the right people can create severe bottlenecks and stall the rollout of new products and services. These are hold ups that no startup can afford, especially in the early days.
And, as your company grows, you might find yourself facing another tricky personnel problem: realising that you’ve hired the wrong people. (Or the right people in the wrong roles.) These kind of uncomfortable truths can be revealed when a startup expands and the cracks suddenly appear magnified.
Solution: Lay out your hiring strategy right at the start. Then, when you’re clear about what you’re looking for, strategise key hires and think carefully about each role fits in with the goals you want to achieve.
7. Partnership Decision Making
Partnership is the essence of success. And this logic holds true for startups as well. In this ever-expanding and ever-changing digital era, where organisations need to battle hard for their survival, startups also find it difficult to find trustworthy partners. It’s really a big challenge for startups today. And as far as tech startups are concerned, stakes in partnership are much higher for them.
Going into a partnership pays great dividends for the startups, but they need to consider a variety of factors before making any decision to collaborate with another company working in the same ecosystem.
Solution: To reap out maximum benefits out of a partnership, startup businesses should look for organisations that enjoy a sound presence within the market and a good reputation amongst the industry giants.
8. Driving Traffic To Online Website
In most cases when running a business, an online website is essential for the effective functioning and operation of the business. An online website is the main tool used by many entrepreneurs to complete many business-related duties, including marketing, promotion, sales, blogging and customer service, as well as being the face of the business in general and what customers refer to for general information.
But with the e-commerce industry continuously on the rise and with many online giants present, many start-ups find it difficult to create any real presence online with a website. Increasing traffic is a huge challenge for many start-ups, and the less traffic being directed to a company's website, the less opportunity the business has for sales, promotion and building the brand.
Solution: Focusing on SEO is the main priority businesses should have when looking to increase traffic. In regards to SEO, businesses should consider which keywords customers are likely to type into google to find their website, and structuring their web pages with these key words in way that ranks their website high in Google rankings. There are plenty of resources which can be found on google in regards to increasing SEO, as well as many different books which explain how to track SEO success.
Other methods of increasing traffic to an online website include blogging, where start-ups discuss important topics and provide useful advice which can draw customers to their website. Networking and commenting on other companies blogs can also be useful for increasing traffic to a start-ups website.
9. Winning Trust Of Customers
Customer is the king. And that’s absolutely right. Winning a customer’s trust is one of the most important challenges that businesses in general – and startups in particular – face today. With a highly satisfied and loyal customer base, startups can scale and make progress towards excellence.
Customers are the real force behind a startup’s success. Their word-of-mouth power and their presence on social media can give tech startups an edge against all the traditional businesses.
Solution: To win customers’ trust and loyalty, startups need to work aggressively to implement a customer-centric working philosophy, so as to enable them to succeed in their pursuit of attaining the height sustainable growth and progress they desire to achieve in this tech-savvy and challenging business world.
Unless you’re remarkably lucky and the cash flows in straight away, either from sales or investors, money is going to be an issue sooner rather than later.
And when cash flow issues hit a startup, they can hit hard, delaying important progress like rolling out products, hiring key staff, or fitting new offices.
You’ll need capital to fund software or product development, office space, marketing, and more. Most of your success will flow from that initial investment.
Solution: Organise and prioritise your payments, to ensure that your business can still fully operate and all critical tasks can be completed. Focusing on retaining and boosting customers is also a great way to avoid financial problems, as this will ensure sales are kept at a constant level and revenue is constantly being generated.