In this era of sheer competition, the road ahead for startups is not at all smooth and almost every entrepreneur has to face a lot of hurdles. “Billion-dollar valuation startups could thin in coming years,” says Dow Jones VentureSource in a report published in 2016. The reason behind the failure of startups is the high risk proposition associated with them. Strategy adoption and execute failures act as triggers in this game.
Keeping all this in mind, we have pointed out a few major problems confronting startups along with their best possible solutions. Here we go with our approach.
Lack of finances
Cash flow is the backbone of every startup and this is proving one of the key challenges to the small startups nowadays. Most of their major problems are associated with finances because the more their income increases, the more their expenditures also increase. Startups heavily depend on their investors who have to keep enough funds both to go around and to pay their employees, contractors, mortgage, grocery bills, etc. Suppose you are running a vaping startup. You will have to spend for the accessories like best empty vape cartridges, etc.
Following four steps can solve the financial problem confronting startups.
- Find ways of minimizing the costs. For instance, you may buy accessories like Jupiter vape battery, etc. at reduced prices.
- Speed up the account receivable processes by requesting clients for immediate payments.
- Secure credit before you need it to survive.
- Use accounting software to keep tab on money coming in and out of the business.
Sound planning on the part of the entrepreneur is the key to success for a startup. A number of small and large startups fail in their very first year just because of improper planning. They do not factor in various challenges and pitfalls. Sometimes, they do get innovative ideas and ambitions, but fail because their overall planning lacks perspective.
The solution to all this is as follows.
- Carry out a thorough research before launching the startup by investigating into each and every aspect of the business; purchases, supplies, manufacturing, finished product, delivery, competitive prices, taxes involved, receiving payments, keeping accounts, dealing with the internal staff and the clients, etc.
- Based on your thorough research, develop a sound planning which should cover what your business is, the market it serves, how to conduct operations and the money it makes and spends, etc.
- Always view your business in a holistic way keeping your vision about your product aligned with the identified target audience.
Lack of a dedicated team
Without a talented and dedicated team, no business can ever flourish because the entrepreneur alone cannot do everything himself. Lack of commitment and dedication on the part of the whole team aggravates the already lying frustration. Nobody likes to take the responsibility of anything and accomplish it to the logical end. A blame game becomes the fashion of the day in that organization and the startup collapses consequently.
The following can save the startup from this issue.
While selecting your team, prefer only those who are not only well-skilled in their respective field but also committed and dedicated by nature.
Keep motivating your whole team time and again to keep their spirits high.
Following the natural principal of the division of labor, do assign the relative jobs and tasks to the concerned staff.
Do watch and check the working of your whole staff randomly in order to keep them alert all the time.
Always care for the rights of your team members so that they may own the cause of your startup and remain committed to it.
* This is a pre-written collaborative post