Building a business from the ground up is a courageous decision that sets you on a path to success. You may be driven by the need to solve problems or making an extra income, or both. Regardless of your motivations, startups are prone to a myriad of challenges and most of them succumb to the pressure and close up shop. Since 90% of startups fail, budding entrepreneurs are advised to accept failure as a fact of life. Here are the five most common difficulties that plague startups today.
- Unwanted Products
This is the single most challenge that many startups are faced with. In many cases, the founders are carried away by a nagging desire to solve a particular problem in society or fill a gap in the market. Unfortunately, most of them end up releasing products that the market doesn’t find useful and hence, the projected sales targets never materialize. This is a significant blow not only to the owners’ self-esteem but also to the financial kitty and this is detrimental to the business’ future.
- Raising Capital
In most cases, a startup starts with just an idea borne out of necessity or sheer creative thinking. However, this idea an only come to fruition if there are funds to execute it. Startups require money to hire premises, hire personnel, research, and development, etc., and they do so by approaching lenders like LendingClub.com and private investors. However, applying for loans or securing an investor is no easy feat, particularly in the first year of a startup. Both options have strict qualification criteria and the process is arduous. Investors can easily get spooked and renege on a deal in the last minute, meanwhile, most lenders require a proven track record of business success before they will agree to lend money.
- Total Commitment
Growing a startup to become a viable business requires undivided time and effort. While most people start off working on their idea on a part-time basis, juggling a full-time job and a startup is not feasible. Eventually, entrepreneurs have to make the difficult choice of walking away from their career and steady income, to focus on building their dreams.
- Visionary Role
The owner of a startup is expected to always be on the lookout for new groundbreaking ideas that will take the business to the next level. This means continuously ideating, understanding the market, and keeping abreast with the competition locally and beyond borders. Being a visionary can be overwhelming especially in solo entrepreneurship. Churning out awesome ideas round-the-clock is expected and slacking on this could tank the business
- Marketing Strategies
After the lengthy ideation process, prototyping, piloting, and all preliminaries of creating a product, the next step is positioning your product with a powerful marketing plan put into action. Remember, nobody knows you or your product and therefore, there is very little social capital to work with. You must develop content to convey your product in the best light and focus on getting customers to make initial purchases. Usually, startups are pinching pennies and therefore don’t have the luxury to hire professional marketing teams. Missing the mark at this juncture means all your efforts go down the drain and your product will never see the light of day.
From an outsider’s viewpoint, startups are these glorious enterprises where the rules are lax and you can play ping-pong in the middle of the day. While this is true for many, keeping a business afloat is demanding and failure is usually just around the corner.