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4 Biggest Challenges That Most Startups Face

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4 Biggest Challenges That Most Startups Face

The very statistic that claims that 9 out of 10 startups fail within the first five years speaks about it being a trend, rather than a fluke or a mere possibility. Nevertheless, given the fact that there’s so much stacked up against them, it’s a proper miracle that even that 1 out of 10 makes it. If there’s one thing that poses as the biggest hazard for any future company it’s – ignorance. Not knowing what to expect down the road and which challenges your startup will encounter during its first year is a dangerous trend. So, to make you better prepared for the future, here are four such challenges.

1.      Idea validation

Just because an idea sounds good to you, it doesn’t mean that it really is a good idea. This is why you need to learn how to validate a business idea. If you lack the in-depth knowledge of the industry, have no idea how to monetize on your idea or have no authority within the niche, chances are you won’t get far. However, just because your idea has failed several simple tests it still doesn’t mean that it’s a bad one. Only that it needs some further planning and another lap in the validation process. Also, due to the fact that you, as the creator of the idea, will be biased, it’s always good to ask for a second opinion. Just make sure that it’s someone you can trust with a money-making idea.

2.      Lack of proper help

Unless you’re starting a one-person startup, you’ll soon need some help with administrative tasks. Even though the idea of micro-managing everything may seem appealing, you won’t be able to do this forever. This is why those entrepreneurs who strategically plan for the long-run tend to start grooming future leaders as soon as possible. In his way, you can avoid the stellar cost of having to hire managers. Also, the person in your employ is already a member of your company, which means that they’re familiar with your brand and all that it stands for.

4 Biggest Challenges That Most Startups Face

3.      Trying to do everything in-house

A lot of people mistake the idea of being self-reliant or self-sustainable with the concept of being able to do everything on your own. In 2019, however, everyone outsources specialized tasks. Why? Well, because this gives you the privilege of being able to dedicate all your skill, resources and effort to your core tasks. We’re, of course, talking about sales, manufacturing and providing vital services (depending on your industry). For instance, there’s no reason why your NSW startup should have an in-house financial expert when you can just outsource to a reputable tax accountant in Sydney and get much better service for your money’s worth.

4.      Problems with cash flow

Finally, most startups fail because they can no longer fund their day-to-day operations. There are so many hidden expenses of running a business and so many financial pitfalls that you could walk right into unless you’re careful. All of this seems to be poised to hurt your, already fragile, budget. Add to this the fact that most startups take 6 months to 2 years in order to become financially self-sustainable and what you’ll get is a recipe for disaster. Still, if you plan this from the start and ensure that you can maintain healthy cash flow, you just might make it.

Conclusion

In the end, just by knowing there is a trap you’ll have much better odds at avoiding it. Nonetheless, planning can only get you so far. Saying that cash flow is a problem is much different from actually experiencing it. Still, some mistakes are too expensive to be a good didactic method. This is why it’s always better to learn on mistakes of others rather than making them yourself.

 

Carolin Petterson is a businesswoman and content marketer with years of experience under her belt. She has had the opportunity to contribute to a number of popular business and marketing websites.

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