The fact that 9 out of 10 startups fail within the first 5 years is on its own enough to support the fact that running a startup is difficult. There are various reasons why they fail, although, some challenges are both greater and more common than others. That being said, here are five challenges that every startup has to face at one point in their existence. Knowing what they are will be the first step on your path to successfully avoiding them.
Keeping up with the technology
The first issue regarding modern business lies in the issue of keeping up with technological advancements, both in the field of hardware and software. When it comes to the former, you have the dilemma of whether to buy or rent. As for software, you have to decide whether to go with free or premium licenses, you have to keep everything updated and in check. This is without managing your online presence and dabbling in digital marketing. All of this, when combined, is the main reason why so many people decide to outsource their IT.
Dealing with taxes
Another thing worth keeping in mind is the issue of taxes, which isn’t nearly as straightforward as you would like it to be. First of all, more and more people are running their home-based one-person startups, which puts them in a spot where they can’t properly handle their operations. They’re uninformed to what kind of deductions their operations are eligible for, which might set them back for the time being. Moreover, sole proprietorships, LLCs and partnerships have different schemes under which they’re paying taxes. To make things easier for them, most SMB and startup owners decide to register as sole proprietors, which might end up being a big mistake.
Reducing the overhead
In order to maximize their profit, most entrepreneurs start considering ways to reduce their overhead, yet, some of these startup owners come to all the wrong conclusions. For instance, they start skimming on supplies or cancel services that boost their team’s productivity. While saving money, this also harms efficiency, thus reducing your income. Instead, they should look for a way to waste less material or avoid paying more than they should for their utilities. One of the ways is to hire a power quality analyser which might discover that you’re paying your utility bill more than you should, thus giving you a consequence-free way to save money.
Handling negative feedback
It’s easy to be professional when responding to words of praise, however, what happens when you’re faced with unfounded criticism of your work? What if people attacking your brand are extra rude or impolite? Will you be able to hold your composure or will you burst out and get entangled in a heated online argument? Keep in mind that the veil of anonymity allows everyone to say whatever they feel like without any fear of repercussion. As a business owner, you don’t have such privilege. Also remember that not all of this criticism is unjust, unfounded or useless. Sometimes, you can learn a lot from this kind of feedback.
Most entrepreneurs are incredibly skilled at micro-managing vital tasks. After all, this is probably what convinced them they have what it takes to become entrepreneurs. Nevertheless, at one point, the workload will surpass you and when that moment finally arrives, you need to know how to delegate tasks. You might still feel tempted to do it all on your own, you might feel the urge to dump all of this work onto your most capable employee but neither of these methods yields positive results. Start early and give your first team as much autonomy as you can. They may come to surprise you.
As an entrepreneur, you need to embrace anything that boosts your odds at survival. Keep in mind, nonetheless, that there are some tasks that you’re simply ill-equipped to handle on your own, which is why entrusting them to others may be a good idea. Moreover, no matter how good an idea may appear at the moment, before choosing to pursue it, ask yourself one question – how sustainable it is in the long run?