Launching a start-up may seem like a dream come true. However, the bitter truth is that all around the world, most start-ups that come into existence fail. The first few years are the most critical period for them. That is when a slew of roadblocks arises and it needs to be overcome quickly and efficiently. The best way to come out on top is to anticipate challenges and problems before they become a serious detriment. Moreover, you have to tackle them in an organized and planned manner.
Here are the 5 most difficult obstacles a start-up is likely to face in its initial stages, and how to overcome them.
1. Managing Cash Flow
The financial side of running a business may not be the most glamorous, but it is the most vital. Even without millions of dollars in funding, you can do wonders for the financial health of an organization with the help of prudent money management. Start-ups that struggle to stay afloat fail to put a payment and invoicing system in place or overlook the importance of making financial projections. That is certainly not the way to patch up holes in the cash flow and ensure you always have funds when you need them.
2. Securing the Funding
Funding is the lifeline of every start-up. Many entrepreneurs use their personal savings to start a business, and once the pile of cash melts down, real problems arise. Without a realistic assessment of a situation and a great financial plan, it is borderline impossible to solve financial issues. Also, it should be noted that many startups stick to bank loans, losing sight of alternatives such as short-term, fast business loans. These sources are often a better fit for needs of start-ups and provide an added value for them.
3. Scaling Up
Scaling up is one of the most common and complex problems that business owners face. We have seen numerous tech start-ups being caught off guard by initial success and consequently scaling up in a haphazard manner. On the other side of the spectrum, we have companies that plan well ahead of time and have a solid strategy for controlled, long-term growth. They tend to put it into motion after achieving a product-market fit and establishing steady sales channels.
4. Building a Strong Team
A dedicated, skilled and motivated workforce lays the foundations of success of a small business organization. A sound hiring policy is a good place to start, but it must be followed up with training, engagement, retention and other programs. Attracting top talent and keeping it onboard gives you an edge over the competition. However, to do this, a start-up must offer more than a steady pay check. They have to foster a positive culture, create a well-designed workplace, and provide various perks and benefits.
5. Handling the Marketing
All start-ups face the same conundrum: how to escape obscurity and avoid breaking the bank at the same time? Well, the answer lies in making the most of cost-effective channels. To get the show on the road, soak in market data and discover your target audience. In all likelihood, you should be able to reach it easily with digital channels like websites, blogs, and social media. They come for a fraction of the cost of TV and radio commercials, yet promise an incredible ROI.
In the Clear
Starting a business is a peculiar mix of consuming, rewarding, and exuberant work. The volatile amalgam can blow up in your face or propel you towards success. So, bear in mind that although the list of problems is predictable, solutions are anything but simple. Come up with a plan before dwindling cash flow, plummeting team morale, squeezing out your budget, and other trouble comes knocking at the door. Get out there, steer away from the most common pitfalls, and you will get ahead of the business game in 2018 and beyond.