Mostly, founders of startups are not able to pinpoint exact challenges in their startup. As per a study, almost 30% of small enterprises crash because of lack of managerial or business experience. But most of the businesses which fail are unable to identify what exactly was the gap or problem. Finding the challenge is one issue and then looking for an apt solution is another. We have collated a list of some common challenges that small enterprises and startups usually face.
1. Product Analysis
All the startups want to be perfect with their brand and be the best in the market. But there are rarely any startups who strike a balance between all the needed features in a product and the best selling price. The biggest challenge for most of the startups lies in identifying whether their brand or product is the correct fit for the specific market or not. According to statistics, 42% of startups shut down as they are unable to create a demand in the market. So how can you overcome this challenge of creating “a perfect product”?
The solution is product validation, which means analyzing the problems in the industry and doing research on why customers would trust the product you offer.
Tips for Product Validation
- Interact with your customers right from idea to product development stage and show them prototypes before the final product launch
- Conduct surveys
- Study your competitors to find any features that might be missing from their product
2. Sales & Marketing
New entrepreneurs should understand that saving money for their marketing is very important. The product should go into the market with a well-thought of strategy; otherwise there would be no sales and eventually the business could fail. According to a study, lack of a proper marketing strategy resulted in failure of almost 42% of startups which were surveyed. The ‘create it and customers will come’ is not the right approach. As a startup owner, you should have a good market strategy coupled with the right funding to enable you to market your product/service.
Tips for having the Right Marketing Strategy
- First find the target market segment
- Look for innovative yet cost-effective methods to reach your market
- Allocate proper budget for marketing and set goals accordingly
- Understand concepts like digital marketing and growth hacking for better marketing strategy
- Closely observe the marketing strategy of your competitors. Then, make yours better and allocate budgets accordingly
3. Getting the Right People Onboard
Hiring the right talent can get tricky for startups because of budgetary constraints. A new company will not be able to spend on hiring experienced talent and freshers need a lot of training. But a startup should somehow employ the right people if they want to grow. Not only experience, employees should also possess the enthusiasm to learn and then work in a challenging environment.
Tips for Finding the Best Suited Employees
- Find people who believe in your idea
- Identify people who are willing to go beyond their set roles and responsibilities
- Go on to offer a stake in your company to the best people
- Look for professionals who can fill in and support you for your shortcomings
4. Financial Challenges
There are ample financial obstacles for startups – be it from raising funds, controlling the rising expenses, saving enough to go through the next few months, etc. Without money, you cannot move a step further and a wrong financial move can cost you big.
Tips to Enable you to Face the Financial Challenges
- While doing financial planning, list the main expenses in the coming few months
- Save some money for unforeseen expenses
- Maintain correct payment cycles with your clients
- Invest in insurances to handle any unexpected disasters
- Avoid raising unnecessary funding
5. Decision-Making
Startups need business leaders who can take apt decisions. A small mistake in decision-making can cost in a big way on the growth of the company.
Tips for Better Decision-Making
- Prioritize the level of each challenge and then take action accordingly
- Learn to make decisions which result in expansion of your business
- Discover how to take calculated risks
6. Lack of Structure
Most of the new startups do not have a proper structure because they are handling too many things at one go. But when the company starts growing, you would need a proper structure thus defining accountability.
Tips to Enable Setting up a Structure for a Startup
- From the beginning, aspire to build a big organization
- Initially when a clear hierarchy isn’t defined, assign a responsible person for every department or task
- Focus on documentation right from the start
Decide clear goals and also attainable expectations
