Over the years I’ve faced many hurdles working in startups. Unfortunately, some of these obstacles lead to the eventual decline of the business. This is very similar to hurdles every startup faces along their journey.
Nonetheless, like every keynote speaker at any conference will say, I’ve learned valuable along the way and gained the most usable knowledge from my failures.
There are certain hurdles every startups faces, depending on how they handle them will determine the success of the business.
Here are five hurdles every startup faces and how you can avoid them.
Keeping Up With Demand
While this isn’t necessarily a bad problem to have, it can definitely cause problems for your business. Just as you would prepare for the worst, you should also prepare for the outcome you are working toward — growth.
In this case, if you can’t keep up with production due to lack of resources or manpower to service demand you may be in serious trouble.
Make sure you have a well defined plan for growth. If you’re just launching your business, make sure you set clear and reasonable expectations. For example, if you have a limited number of product, make sure your customers know there may be delays if supplies run out.
In addition you should pay attention to surges in demand, like during the holiday season. A surge in demand should never be your biggest issue.
Acquiring New Customers
Build it and they will come. It sounds nice, but unfortunately it’s not always the case and one of the major hurdles every startup faces. Even if you’ve built the best product or service in the world, you won’t last very long if you can’t get it in front of your ideal customer.
For small businesses, Facebook Ads are a great place to start. Facebook’s massive user base and their specific targeting options make it very easy to attract your target audience from day one. Facebook Ads shouldn’t constitute your entire marketing strategy, but they’re a great place to start.
Raising Capital too Early
The majority of startups think they need to raise large sums of money in their early stages in order to be successful. While it may make things easier, it often leads to poor decisions.
Once you accept investment, you’re not only giving up partial ownership but you’re also putting a huge amount of pressure on your company. Raising money more or less “starts the clock” for your startup and puts your company on the map.
The best way to avoid this potential snag in your budget is to bootstrap as long as you can. While you bootstrap, the core competencies of your business will become apparent.
This will force you and your team to focus on what’s important and “trim the fat” wherever necessary. In addition, you can pivot as many times as you want without the pressure of outside investors or the public eye.
Building a Strong Team Chemistry
As with any team, team chemistry is more important than individual talent. It’s common for business owners to jump on individuals with colorful resumes and a decorated track-record. Sometimes they don’t pay attention to synergy. Talent may look good on paper, but if they don’t fit well with the rest of your organization, it can lead to the downfall of your business.
Resumes are written and presented with so much fluff that it’s often difficult to determine who’s the best candidate. Once they’re initially screened, it’s best to throw any potential candidate straight into the mix of your people to see how they interact with your current staff.
Those who can easily assimilate into your organization are the ones worth keeping. In one organization I worked for, the hiring process included interviews conducted with each member of the team separately. I could immediately tell that I really wanted to work with these people, and luckily, they in turn wanted to work with me.
It was a great experience and process I have assimilated into my own organization.
Getting Paid on Time
Many times startups focus so much on acquiring new customers and clients they forget about their accounts receivable.
Cash flow will make or break your business, hands down. It’s absolutely imperative that you stay on top of your invoicing so you can keep a steady, and hopefully positive, cash flow.
The best way to properly manage your billing is to use an online invoicing solution. The majority of the top payment companies and online payment solutions provide a suite of payment and accounting products. Businesses of all sizes can use these.
Pay close attention to rate quotes and make sure you pick a solution that can easily scale with your business.
In startups, there will always be ups and downs. Your success will be entirely dependent on how you manage the downs and evaluate the ups. Take note of these five hurdles nearly every startup deals with. Make sure you take the necessary actions to avoid them.