Did you know that over 50 million startups come up every year? It is growing in popularity around the world, but as a beginner entrepreneur, it is easy to get caught up in all the success stories. It is also essential to know that startups face several problems, and it is usually a matter of survival for the fittest. It is estimated that 90% of startups fail because they cannot survive the heat of business. Let us look at the most challenging problems faced by startups that you should be aware of as a young upstart.
Competitive business environment
For starters, you may come up with a unique business idea, but the truth is you will not be alone in the business for so long. Business competition is one of the toughest challenges facing startups, and it is stiffer in the online business space. Depending on how you handle competition, it will define your success or failure. You need to strategize how you will grow above the competitors. Make your brand unique and your product and services better than the competition. You should also collaborate and build networks with support businesses to learn and grow. More importantly, do not forget to keep innovating.
Recruiting unsuitable candidates
You are starting your business, and so you need employees with capabilities of scaling your startup upwards. There are many people available for the job, thus finding the right candidate is usually so hard. Getting the wrong employees for your startup could lead to significant losses due to problems like low productivity. For a start, opt for more part-time employees in your startup than the permanent ones to save on costs. You can also use freelance talent online rather than hiring full-time employees
Setting unrealistic expectations
As a startup owner, it is okay to have high expectations but make sure that they are realistic. Unrealistic expectations can destroy your startup. Do not expect quick returns on investment, to scale up fast in the business environment, or to get funding. If your expectations are not met, you may feel frustrated, and this can affect the continuity of your business. Now, when you set expectations, take a cautious approach, and set objective goals. Consider available resources and your business growth potential, among other odds. More importantly, be open-minded and do not be enslaved by your expectations.
Tax problems
Failure to understand your business’s tax laws contribute to tax problems in many startups. Tax problems could lead you into deep trouble with the IRS (Internal Revenue Service). You can incur hefty fines and penalties, or even worse have legal actions taken against you. This can cost you a fortune, a feat that could kill your venture. So, ensure you engage a highly awarded and recognized tax attorneys right from the start of business to avoid issues with the taxman. Stay on top of your tax obligations and always solve problems fast before they escalate.
Identifying the ideal customer and winning their trust
The primary agenda of establishing a startup is to make a profit and grow. To enhance this, you need loyal and highly satisfied customers. But, identifying the customer and winning their trust can be challenging. Customers will be hard to convert and retain than you think. You will need to establish your prospects and provide what they like. Let your product and services be unique and satisfying to the end consumer. You should also invest in proper customer support as this will make them your consumers feel valued.
Financial constraints
Financial constraints are a significant challenge in startup owners as they may not thrive immediately or get any support funds to run the venture. The business may struggle in areas like sustaining qualified personnel and developing a product, issues that constrain the growth of the business. So before starting your business, ensure that you have financial reserves to carry your through before the startup can foot its operations. You should also know how and where to source funds to help you grow.
Cyberattacks
Startups are usually vulnerable to cyberattacks, given that most do not have the right resources to protect their business. Cybercriminals may gain access to sensitive information like documents, emails, bank statements, and employee details, etc. A breach can kill your business! That is why startups should ensure that their networks and devices are always secured. Use strategies like installing firewalls and antimalware on your devices and networks, updating your software tools, educating your team, implementing password security, etc.
Wrap up
In a nutshell, before establishing that business you are looking to start, you should be aware of the problems you are likely to encounter. You should be ready to problem solve but then again, do not let the difficulties deter the success of your business. Remain focused and resilient. You can get professional help to avoid making mistakes that might hurt your venture.
