Challenges of a startup varies at various levels. The challenges range from cash flows to family support to choosing the right investors when you are raising funds to just a simple one as hiring of right people with the same passion.
“One of my colleagues once told me that starting a company is 20% idea/strategy and rest 80% is execution.”
As any idea, no matter how good it is, it can easily be copied. The idea is the necessary starting stone and if your idea is exceptional and has mass appeal then get ready to make it big.
To my understanding, here is a list of the top 8 challenges that a startup faces:
Need or Gap Fixing: It’s all about delivering a product or service that meets a critical need of the hour. A well-planned and executed product will flourish regardless of the harsh economic climate whereas, a poorly planned and executed product will fail in the best of times. Find an urgent need and fix it better than anyone else.
Execution: Execution is the key to sustain in the long run. The difference between you and your competitors will lie completely on how you have executed your business plan. If you are successful in doing this, then you will surely steal the show.
Raising Finance: Whether to go for debt or equity funding? Terms of getting the funds? How and What cost? Crowd-funding or Bootstrapping? Very early if the startup can hire or collaborate with an Expert or Mentor who is skilled in raising capital then this will help a lot in the long run.
Human Capital: Finding the right team who can share the same passion as the founders is the most challenging part. Staff is an important area for early stage startups as the selection of each member is vitally important yet they often lack the capital necessary to attract top talent which is the key to faster progress.
Cash Flows: Handling cash flows both in terms of short term and long term objective is key. As an entrepreneur, he or she needs to look at this key aspect very minutely.
Unrealistic Expectations: The business projections are not always on the excel sheet. If you can do it right, then its great but realistic approach towards it is necessary. This means to have a realistic approach towards business growth and to be prepared for the best and worst scenario.
Research: This is one of the biggest challenge for any startup. Finding right target audience to feed its products and services is the key. Gathering accurate data to back certain assumptions on business projections is first step. Once this is done the excel sheet can show some valid projections.
Customer Acquisition & Retention: I think it is just not about running for the customers it is also about retention of these customers so that the fixed retainer is coming every month which many entrepreneurs forget.
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