Challenges Faced By Startup Companies

Becoming an Entrepreneur is a dream for many people in the world. But in order to start a new company, he/she need many factors like money, time, endurance, sacrifice and a lot of effort. The driving force and penetration of the startups are due to the large population of the middle-income group, educated people with technical background, IT domination, high internet, and mobile penetration. Infrastructure, government regulations and the availability of finance at various stages of growth could be some of the challenges for startups. Some startup companies use the fund properly and rise up to shine while some fail to keep up with the market and eventually fail towards the end. The below factors mainly contribute to the rise of a startup company.

Financing

No entrepreneur going into business does so with a plan to fail, but inadequate access to working capital and other financing options is a huge contributor to a business’s lack of success and ultimate failure. Many factors go into a business owner’s lack of working capital, from a low credit score and inability to borrow from traditional financing sources to operational issues affecting cash flow. It is important for a business owner to understand the root of the problem with respect to the lack of financial capability and alternatives to traditional funding, including working capital loans.

Marketing

A startup may definitely suffer if they don’t have sufficient information and knowledge about the marketing systems. Effective marketing doesn’t cost a lot of money to startup entrepreneurs. Higher-budget marketing strategies might bring more visibility and consistency in their eventual returns, but there are plenty of highly effective, low-cost marketing strategies one can use to help their startup grow. Some are mentioned below:

Content Marketing

Referrals

Press Release & News

SEO

Social Media Marketing

Email Marketing

Forums & Groups

Personal Branding

Guidance or Mentoring

One of the main reasons for the failure of startups is the lack of experience and competency of new entrepreneurs. Entrepreneurial mentoring can be viewed as a business development process for owners/managers. This is based on the premise that there is a direct link between entrepreneurs’ actions and capabilities and the performance of their businesses. A good mentorship can amplify an entrepreneur’s chances of success in life and in business alike. The valuable connections, timely advice, occasional checks, and their supervision will provide more spiritual and moral guidance to the entrepreneurs. So, undergoing a mentorship program can help the entrepreneurs gain a valuable jumpstart towards success.

Correct Team

It’s important that the team that has been recruited for the startup must be united with a common vision and has agreed upon the startup’s long-term goals so that everyone remains on the same page as the startup grows. The investors of the startup need to feel confident that the team the entrepreneur hired is the right one to take the company from a small, great idea and turn it into a high-yielding investment. The goal here is to convince an investor or financier that the hired team is prepared to face all the challenges and criticisms that come with running a business.

A startup company has to face many initial challenges in order to stabilize and operate under optimum conditions. The success of the startup company entirely depends on the entrepreneur along with their goal and vision for the business.