It isn’t the mountains ahead to climb that wear you out; it’s the pebble in your shoe.
It’s December already! The year twenty-twenty is just around the corner! It’s about time that we accept and live with the fact that this is the age of startups. The past decade has witnessed an exploding amount of upcoming entrepreneurs, which has completely boosted the startup ecosystem across the globe. What’s inspiring these forthcoming entrepreneurs? These entrepreneurs, with their startups, are determined to challenge the pedigree of the underlying domination of big and established firms.
Many startups work, work, and work to make their presence felt, whereas many other startups die out into oblivion. Now, the thing is, what is it that these significant startups are doing to make a mark that the dying out startups are missing? Whether you like it or not, Everything in this world is based on the principle of ‘Survival of the fittest.’ A startup’s road to success is not easy! If you think you can cross a desert in a sedan, you need to think again, my friend! You need an SUV to steer to success!
Here is what I am implying! Startups must execute their business ideas systematically and in a planned way to bring value and merit to their ideas. As per a report by Dow Jones VentureSource, startups, with billion-dollar valuations, could witness huge losses soon? This leaves us with an important question, i.e., Why do startups fail? What is it that these startups are missing?
When talking about How to deal with business challenges , we will mainly talk about the Operational Challenges and Financial Challenges!
How to Overcome Operational Challenges in a Startup?
Neglecting Marketing and Sales
Neglecting marketing and sales is the last thing that you want to do! Are you putting in the required resources into marketing and sales? Although, you might have the impression that these services are not mandatory, but then that’s precisely where you are going wrong. Word of mouth is never enough!
Even if you are a SaaS company, sales won’t autonomously grow organically over social media. You still need a team dedicated to marketing and sales if you are looking to hit the numbers. It is improbable that your potential customers will discover you all by themselves. You are asking a little too much from them. To be able to sustain in the market, one of the most important things that the operations department needs to consider is, hiring the right people who are capable of marketing and bringing in sales for you.
Opting for a sales and marketing team is not an option; it is a need, and it is money well spent. Consider it as an investment, that’s going to get you returns. Also, the operations need to make sure that they align the marketing and sales team right from the start.
Lack of Planning
It’s very intriguing to me as to how startups consider entering the market without a solid plan! Or maybe, they do have a plan but forget to include the basics in their go-to-market strategies. When running a startup, key areas such as sales, developments, shortage of skills, and staffing cannot be afterthoughts.
If you are a startup and are at the planning phase, you might want to read more about Setting up Your Own Offshore Development Team Is Easier Than You Think!
These are the basics, and you need to include in your business plans. Planning is vital. In fact, planning for the things that you can’t predict is also essential. What do I mean by that? If things take an unexpected turn, you should be prepared for it. In a startup, nothing is guaranteed.
Nothing is permanent. You need to be on your toes all the time, and the right planning, understanding of what to do in what situation is one of the keys, startups need to plan for. If you fail to prepare for such uncertainties, you might as well prepare to fail!
Finding the Right Team
It is absolutely imperative to have a team that delivers. You want to work with people who intend to take your startup to the next level and not with liabilities. For this, it is crucial to give staffing the importance it deserves.
When I say staffing, I mean you need to hire correct resources, which will turn out to be assets for you. However, as we all know, startups run on a stringent budget, the best way of getting the work done is considering outsourcing your IT needs to a staff augmentation company. Staff Augmentation companies allow you to hire managed remote employees who can deliver quality while being cost effective.
Good Read: Remote Staff Augmentation for StartUps
Startups are very different from established organizations in terms of time management. A startup means working 24/7. There are many decisions that you need to make every now and then. If you are looking to get productivity and want to scale your business, time management is something that you need to focus on.
There are only 24 hours in a day! Only 24! Begin with eliminating distractions. You should be in a position to look away from absolutely anything that could distract you. A quick way to do so is, ask yourself what your priorities at the moment are, and what can wait till further.
Before you make decisions, you need to be certain if your resolution is going to help you get a faster pickup? As a startup, you need to stop worrying about things that are not a priority and start managing your time in a more effective way to boost your business.
Successful startups are phenomenal in managing time. They are aware of what’s happening, and they set the right goals, and achieve them through intense focus and efficient delegation.
Lack of Sufficient Working Capital
This is one of the most prudent problems that most startups across the globe face. It’s challenging to emphasize the importance of such backup funds, but my advice, do whatever you need to, but keep a backup savings account. Consider storing all your excess over the head income, such as your tax savings and your savings on utilities in a backup savings account.
Working capital is the fuel for any startup to run and function, and it is the responsibility of the entrepreneur to make sure that they have a minimum of 6 months’ expenses for the rainy days. This needs to be taken care of on a priority basis because if you don’t have sufficient working capital, you won’t really have the breathing space to build your product, hence witnessing a downfall.
As an advice, it is wise to take out 20 percent of your capital and save it for the rainy days. Also, if you have just entered the market and haven’t really made profits as of now, make sure that you are sufficiently financed. Also, as I mentioned above, considering outsourcing your IT needs to a staff augmentation company could positively help you grow your business in a cost effective manner.
Late Payments from Clients
Today, even in the 21st century, the majority (80%) of small and upcoming startups face huge challenges because of late payments regularly. This is not cool, as it can eventually bring your business to a standstill. How do you avoid such circumstances? Consider cementing your credit terms by implementing policies that will help you manage such obstacles.
Some ways of not getting into a situation like this include pulling in business credit from new customers, incentivizing early and quick payments, come up with late payment penalties, and communicate payment policies right at the start. Oh, and yes, remember to do all that with a smile! It’ll work!
You are not Choosing the Right Funding Option
Now, let’s talk about funding. As a startup or an entrepreneur, it is vital to understand and know what do you need the funds for! There are plenty of doors to knock at for funding, but only an informed startup or an entrepreneur can tap the right door! Some of the funding options available for startups are bootstrapping, friends and family, crowdfunding, business loans, grants, venture capital, and angel money. Get funded, but don’t get fumed!
Having so many options for securing funds could be seriously tempting to startups, but it is only wise to know and understand your requirements and your current financial charts. Also, it is imperative to assess the risk tolerance for every funding option mentioned above. Make sure you do complete and thorough research, analyze your needs, and only then knock at the right door.
Read More – How to Fund Your Startup?
Improper Revenue and Expense Projections
For any business, big or small, online or offline, it is a mandate for the entrepreneur to be aware of their revenue sources along with their business expenses. For a startup, I do understand that it is tricky to predict revenue, but what about the expenses? I’m sure that’s do-able. Expenses are not difficult to calculate as they remain monotonous month after month, with some exceptions during the course. Here is a savings calculator for your reference!
Being impulsive with your expenses can pull your business towards rags. Hasty financial decisions usually lead to off-track spending, which can then affect your entire budget. For all your decision making, your budget should always be one of the top considerations.
Finances are the fuel for any business, and no business can run without a consistent cash flow. Because of this, it is very important to be financially prudent and keeping track of your finances to stay ahead of the game.