Do all startups evolve into successful businesses? No. Of course not.
In fact, most of them may fail to survive the first year.
As inspiring and alluring as the idea of a startup may be, startup challenges are plenty. At every decision point, the mettle of your business idea is tested. Talk to any successful startup and they will narrate a success story dotted with hurdles, both big and small.
The good news is that since most of these challenges are primarily a question of operational issues, proceeding strategically can help you overcome them. Listed below are the most common startup challenges along with some suggestions that will help you vanquish them.
Startup Challenge #1: Hiring Right People
That’s exactly why one of the biggest decisions you’ll make in your company is who to hire for your startup. Your first 5 employees will impact your company culture, processes, growth trajectory and so much more. If you choose the right people, you’ll be able to build a steady foundation on which your company can grow. But, if you make the wrong choices, you’ll delay your growth. Furthermore, you will have a shaky foundation that needs to be rebuilt.
That is why it’s essential to first identify 5 key roles that are needed in a startup and understand what their role entails.
Startup Challenge #2: Gaining Customer Trust
Consumers tend to treat businesses the way they treat other people – holding them to certain standards and building relationships with ones they have faith in. In other words, they want to engage with companies that won’t let them down. Makes sense, right?
Offering value for their money
The best way of gaining customer trust is by offering value for their money and other unique benefits. Setting your business apart from your competitors can earn you loyal customers.
Transparency and honesty
Consumers tend to treat businesses the way they treat other people – holding them to certain standards and building relationships with ones they have faith in. They trust honest, transparent companies and that trend extends across your organization. Your marketing can’t be misleading. Don’t make promises in your sales copy that you can’t or won’t deliver on.
And be straightforward and ethical beyond that.
Startup Challenge #3: Raising Money
Startup companies need to purchase equipment, rent offices, and hire staff. More importantly, they need to grow. In almost every case they will require outside capital to do these things.
The initial capital raised by a company is typically called ‘seed’ capital.
So, at what point should a founder look to raise seed money?
Once founders have their idea and business model, it’s usually the right time to raise capital. The timing of raising seed money can have a huge impact on the outcome. Before deciding on the appropriate timing, founders and entrepreneurs need to be prepared with a meticulous business plan, market research, and roadmap for product development.
In addition, before going ahead with the process, the product should also be ready to hit the market or at the very least in a development or prototyping stage.
Startup Challenge #4: Making Sure There’s a Market For The Idea
Once you’ve hit on that perfect idea, the second thing you should do is determine whether or not it’s actually marketable. The number one reason for failure in the tech industry is that entrepreneurs misjudge the size of the market for their idea.
Just because you design a slick app that feeds your dog when you’re not home, doesn’t mean enough dog-lovers will buy it to make your company profitable.
You need to perform market research and determine whether the size of the existing market will support your company. It takes money to develop your idea into a solid product. If the market is not there, you may launch your product to great fanfare, only to see your company go bankrupt later on. You need to run market projections to determine your money needs.
Finally, the most important thing. Be willing to accept the figures if they tell you that your idea won’t make money in the long run.
Startup Challenge #5: Lack of a Content Strategy
Behind every brand, there is a host of relevant content that connects them with a relevant audience. But, success in content marketing begins with having a well-detailed content strategy that clearly defines objectives, terms, roles, and responsibilities.
You may have already heard this one but ‘failing to plan is planning to fail’. Creating a strategy that is clear and with foresight is essential for your success. From editorial calendars, training, and managing of editors and authors, content approvals, performance measurement… There is a lot to manage and your plan needs to be bulletproof! The slightest flaw in planning will compromise your success from the starting point.
Your strategy should basically be an outline of your startup. It should deliver what was promised to your customers. It should be a detailed plan that you can use to address your target audience. Remember, there is no generic content marketing strategy template, as every business needs to come up with its own. Their unique content marketing strategies allow them to accomplish their distinct business goals.
Startup Challenge #6: Lacking a Crisis Management Plan
The spirit of entrepreneurship means having the courage to face unplanned events and face unfathomable outcomes – collectively and loosely known as ‘disruptions’ – commonly known as ‘crisis’.
Before a crisis strikes, business owners should think about how a disaster would impact employees, customers, suppliers, the general public, and their company’s value. A crisis can strike any company anytime, anywhere. That is why advanced planning is the key to survival.
While planning for a crisis may seem quite ironic, given that the very definition of the word is something that happens unexpectedly, it is incredibly important that business owners invest in creating a crisis communications plan. A thoughtful and well-crafted plan has the potential to save your business from complete catastrophe.
Startup Challenge #7: Cyber Security
The advancement of technology and the rise of internet culture made it easier for businesses to achieve their objectives and goals, but it has also made their IT networks more vulnerable to cyberattacks. Cybersecurity, data privacy, and regulatory compliance have become increasingly essential business challenges for startups and small businesses.
Security threats (often) come from within
Whenever we think about hacking, we think that it happens from outside of our company or organization. But the harsh truth is that a lot of cyber attacks have a root cause in some form of employee or organization negligence. That is why this has proven to be one of the biggest startup challenges. Luckily, you can do something about it.
There are preventive measures that can be taken by providing employees with training programs. These programs can help in safeguarding a company’s sensitive information. It can help the employees in learning to identify phishing emails from authentic ones, not to use unprotected networks to log in to the company’s server, avoid installing unsigned third-party apps, etc.
It is worth saying as the conclusion, that there is actually no single solution for all the challenges your startup may face in the cruel world of modern business. The truth is, to survive, startups have to be tough and put effort to continue their mission when their initial impulse will begin to fade out.
Rather than cling to an idealistic vision of what it means to start a company, it’s essential that you anticipate the risks and challenges that come with founding a startup so that you can plan ahead.
Take it one step at a time, and always remember startup success is the total of small wins.