Startups deal with a number of growing pains, but knowing and anticipating the roadblocks you may encounter in your startup journey could help you prepare beforehand, and possibly avoid common pitfalls. Here are four major challenges startups face and how to overcome them:
1. Rapid Growth
It may seem like a dream come true to see your startup grow at an enormous rate; however, many startups fail because their owners aren’t prepared for rapid growth and don’t know how to handle it.
“Experienced entrepreneurs consider this kind of phase to be one of the best opportunities for their startup, though, and not an obstacle. By realizing that this is the right time to move out of the startup mode and leap into the scale-up mode, startup owners can start hiring the right kind of talent and carry out the organizational changes that are required to handle this massive shift in their paradigm.”
2. Financial Management
What exactly goes wrong to cause a startup to run out of money? Often, it’s because they fail to achieve the next set milestone before they run out of funds.
“The real issue is that it becomes tough to secure more funding in such a scenario since the results don’t match the expected growth. Even though it’s still possible for startups to raise more funds and keep the ball rolling, the valuation would be much lower.”
3. Competition
Competition is fierce and poses as one of the biggest challenges for the survival of startup businesses, especially if your business operates online. The competitive environment keeps startups on their toes, as there is no margin of error available. But if startups can find a niche market and differentiate themselves from their competitors, the reward is great.
“Though many businesses can choose to offer rock bottom prices for specific products or services to lure in potential customers, implementing this could be tricky if the associated industry or manufacturer has specified a MAP Policy,” says Daniel Relich, CEO and co-founder of Tradevitality, a MAP monitoring software.”
4. Tough Market
The current market is always changing, which can make it difficult for startups to keep up.
“Although a vast majority of startups across the globe strive for innovation, they are highly likely to get easily distracted by starting multiple projects, trying to penetrate new markets or adopting latest technologies. This often makes them lose sight of their niche market and core projects.”
Another reason why startups fail is because they don’t create a product or service that meets the market’s current needs. This could either point towards an issue with basic execution or a bigger strategic problem. The solution is to build something which truly adds value to the market and has a large audience that needs it.
What are some of your suggestions and ideas for startups to find success? Let us know!
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