You may see thousands of successful businesses but most of these companies had to start somewhere and build their way up. The massive corporations you see today had to face startup challenges to become who they are.
According to statistics 20% of businesses fail within the first 24 months of launching. So, what causes an organization to fail and how can you overcome these startup challenges? If you’re planning on starting a business, then you’ll find valuable information in this article. Find out the major difficulties you may face and how to overcome them.
Lack of Business Planning
One of the most common reasons startup companies fail is because of a lack of planning. Without an effective business plan, you won’t know how long it will take before you start making a profit. The money you make funds all your financial decisions.
Additionally, you won’t be able to pitch your business idea to potential investors because they won’t see the true potential of your company without a plan. It should be noted that companies that plan grow 30% faster than organizations that don’t plan effectively.
Action Plan
As soon as you have a business idea you should get a well-structured business plan template to fill out. This should be a detailed document that includes your:
- – marketing strategy
- – Sales strategy
- – Company description
- – Core objectives
- – Financial goals
- – Details about your products or services
- – Staffing
If you’re not sure how to draw up a well-structured business plan, then you may want to opt for a consultant agency to assist you.
Massive Competition in the Industry
You may be entering into an industry that doesn’t have a demand for the product or services you offer. In these types of industries, the competition is fierce and unforgiving. For example, if you want to develop a makeup line, you will be up against major brand giants such as Revlon, Estee Lauder, and Chanel.
It can be extremely difficult to gain recognition in a world of ever-changing and growing corporations. To stay ahead of your competitors, you need to always be aware of what’s happening in your industry so that it doesn’t affect your business.
Action Plan
You could go into an industry with a product that isn’t in high demand but still become successful. To achieve your goals, you must know the pain points of your target market. Then you have to find ways to solve your customers’ pain points.
Another way to stay ahead of your opposition is by setting competitive prices on products and services without compromising on quality. You must also provide excellent customer service because it can boost your revenue between 4% and 8%.
Hiring Quality Candidates
Employees are needed to grow your startup business because they’re the ones that will work closely with your customers and clients. However, you need to hire trustworthy members, and this seems to be a huge startup challenge.
The people you choose to work for you can either make or break your startup company. A negative employee can also damage your team’s productivity and cause unnecessary office politics. Some startups will simply hire the candidates without properly vetting them.
Action Plan
To hire high-quality employees, you must first post a well-structured job description. The description should include:
- – The position of the job e.g., manager, administrator
- – The experience level needed
- – What qualifications are needed
- – What the candidate’s duties will be
- – Starting salary
- – Benefits offered
- – Skills that are required
By posting a job description, you can collect resumes of all the candidates that may fit your criteria. Narrow the resumes down by checking what qualifications the candidates have and their working experience and choose the best ones. Then it’s time to conduct interviews with the people you think will be ideal for the job.
The interview will allow you to evaluate the candidate’s demeanor and if the applicant’s skills and personality meet the job’s requirements.
Not Having Digital Platforms
For your startup company to grow you’ll need to use digital platforms to promote your brand and attract new leads. We are living in a digital age and not having a website can be detrimental to your company’s success.
Social media is also an important part of your digital marketing efforts. Without social media, you won’t be able to create strong brand awareness and you’ll fall behind your competitors. Digital marketing can also be difficult for startups because it can be complex.
Action Plan
When you develop your business, you must also include brandings such as logos and a company name. These branding details must be present on all the digital platforms you create. Upon launching your business you should also create a well-structured website.
If you’re not sure how to build your own website, you can hire a professional to assist you with the content and design work. Make sure your website has all the key details pertaining to your company such as:
- – Contact details
- – About Us section
- – Your mission
- – Products and services offered
- – Pricing
- – Ordering system
You also want to sign up for social media accounts for your business such as Twitter, Facebook, LinkedIn, and Instagram. These platforms allow you to engage with your customers and potentially attract new leads.
Poor Financial Management
One of the reasons businesses fail is because owners don’t know how to properly manage their finances. If your organization’s costs are greater than your revenue your business may become bankrupt.
Action Plan
Understand all the costs that are involved when running your business which include utility and overhead costs. This will help you budget from month to month so that you don’t fall behind with payments.
Furthermore, make sure that your products and services are priced correctly so that you are making a profit. To manage your finances effectively you must create a cash flow forecast because it predicts your sales, profits, and losses. With a cash flow forecast you’ll know what money is coming in and going out of your business.
Final Thoughts
Starting a business is a huge responsibility and it can be overwhelming if you don’t know where to begin. Daveron Networking specializes in helping startups develop their pitch, business case and model. What’s more, our team of experts can assist you with financial forecasting as well as a strong marketing strategy to boost your company’s growth.
Ready to grow your business? Speak to our growth experts and learn how to expand your customer base, drive revenue growth, and optimize your business operations.
