The United States is the leading country in the world in the sheer number of startup businesses. According to one expert estimate, there are close to 69,000 startup businesses in the country. This is an astounding number and is one of the key reasons for the country’s great economy.
Startup ventures, however, are some of the most fragile forms of business. Due to their relative youth and small sizes, they can collapse due to any number of reasons.
If you are planning to launch a startup business of your own, you’ll need to familiarize yourself with the most common challenges that entrepreneurs face. Learning about these obstacles can be instrumental in making sure that your enterprise not only survives but thrives in today’s economic landscape.
Below are six common hurdles startup businesses encounter:
A perennial problem of all new businesses everywhere is the lack of money.
A common issue that startup businesses run into is not having enough money before they even open their doors to their customers. This can stem from miscalculations during the funding phase or making poor purchasing decisions.
Business owners can rectify money problems by carefully assessing all the required costs of the startup business. Another solution is to take out strategic businesses loans to keep your company in the black.
2. Entering a Highly Competitive Industry
Another common challenge is opening a startup business in an industry that is already overflowing with similar enterprises.
Take this as an example: you may think that you are hitting the jackpot by opening a boutique bakery, but you can be wrong, as there are a number of boutique bakeries out there trying to be unique or special.
You can avoid heavily competitive industry segments by performing a thorough analysis of local businesses. You also have the option to go into different segments of the tech market, such as smart home systems. These segments tend to have fewer new businesses but have plenty of early innovators.
3. Lack of Planning
Startup businesses can be deceptively complicated to nurture. You must have a solid plan of action for at least the first three months of operation.
Many new business owners, unfortunately, look at their businesses as finely tuned machines even when it needs constant adjustments. This will lead to disaster.
As a business owner, have goals laid out for each quarter or the year and formulate a business plan around them. Should a crisis or a problem arise, make sure to incorporate it into your business plan and adjust accordingly.
4. Unrealistic Expectations
Many startup business owners dream of becoming serial entrepreneurs and making it big over the next few years. They tend to project unrealistic expectations on how much their startup should be earning and how quickly it has to grow. Unless you want to set the wrong pace for your startup, you would do well to set realistic goals for your first year in operation.
Instead of demanding that profits skyrocket by 100 percent in six months, assess your current earnings and formulate a more reasonable projection. Realistic expectations mean you and your employees won’t have to stress out over meeting daunting benchmarks. They also give your business the natural pace it needs to pick up speed.
Yet another problem startup businesses often fall victim to is expansion.
These problems usually take two forms. First, the business can be barely expanding because of missed opportunities, poor decision-making and lack of a sizable customer base to support growth.
Second, the business owners could have bitten off more than they can chew and have expanded too aggressively, straining available resources, overworking employees and sacrificing quality for progress.
Either type of expansion problem is sure to lead a startup business to disaster. The best way to curb this problem is to take measured steps and follow reasonable business plans.
It’s not just multinational corporations that can fall victim to hackers or malware. Small businesses aren’t exempt from things like phishing and ransomware. As a matter of fact, small startups are more prone to cybersecurity attacks, as they lack the sophisticated defenses and firewalls of larger businesses.
This doesn’t mean, though, that your business will be totally defenseless against these cybercriminals. You just have to teach your employees cybersecurity tips, such as ignoring and deleting suspicious emails and avoiding sketchy sites.
Second, there are plenty of small cybersecurity providers you can hire to provide your computers with at least a modicum of digital protection.
Running a startup business is one of the most exciting things in the world. You, however, need to keep your eye on the ball and watch out for challenges that can bring it down. Understanding these common hurdles is just one small step in securing the future of your enterprise.