How to resolve critical challenges in a startup

Starting one’s own business brings many benefits. Doing something that one loves and attracting customers to buy the product or service he has created is hugely rewarding. Growing a company and providing jobs for other people can be another big thrill.

But when it comes to running your own business it is not easy. Working for yourself without the safety net of being an employee parallelly having to take the onus of own employees can be a lonely, frustrating and challenging experience. By understanding the challenges one might face and how to deal with them, in that case, he would be much better prepared for potential problems and give the business the best chance of success.

10 biggest start-up challenges

?Listed below are ten of the biggest challenges that business startups?face in their course of the entrepreneurial journey:?

1. Failure to plan

CHALLENGE: The idea of launching a new business idea is exciting. People are at times tempted to launch but they do it without much strategic business planning?and forward-thinking. Yet a lack of planning can mean the business would run out of cash or is not prepared for vital activities such as sales and marketing?or dealing with suppliers. Business owners who plan properly and systematically and set themselves objectives are more likely to succeed.

ACTION: One must create a detailed business plan that covers areas such as staffing, finance, sales and marketing. Regular reviews and plan update is required as the business develops.

2. Lack of demand

CHALLENGE: One must understand the market need for the product or service as it is a crucial aspect of the business plan.?Without enough people willing to buy the product or service, the start-up would not succeed, no matter how great your idea.

ACTION: Leaders must spend time conducting market research to collect information about the target market and potential customers. This would reveal the target market’s size and help to decide the?demand for your business idea.

?3. Ineffective marketing

CHALLENGE: Entrepreneurs often get caught up in the latest marketing trends and spend lots of money on marketing techniques that end up costing more than the sales they generate.

ACTION: Marketing strategies should be effective and pre-planned. One must create a marketing plan for how he intends to reach his customers. Most start-ups operate on small budgets, so they must investigate different marketing methods. They should look for avenues for low cost or even freeways one can reach your target audience.

If a startup has funds allocated for marketing, it must invest wisely in the most appropriate tactics. All the marketing activities should be measured and tactics to be adopted if necessary.?A marketing expert can be outsourced if one lacks the time and skills to do the job. If need be, one might seek help from management consulting for startups.?

4. Knowledge and skills gaps

CHALLENGE: As a first-time entrepreneur, it is unlikely that one would know everything about running a business. A lack of knowledge can lead to avoidable mistakes that could cost one his whole or part business money. He would also need to overcome enormous demands on his time and energy setting up a business.

ACTION: One must gather?as much information he can, particularly about the industry that he is entering, the customers that he is targeting and the competitors he faces. He should also gain knowledge about critical areas such as finance, marketing and sales, from business advice websites, by attending events, joining business groups and seeking mentors.

It takes a lot of work to build a business, so one needs the requisite drive and energy. Being self-confident is a bonus.

?5. Financial management

CHALLENGE: The biggest reason for start-ups failing is poor financial planning. If the costs are greater than the revenue coming in, the business would not succeed.

ACTION: One needs to understand all the costs the start-up would incur and make sure that the products or services are priced appropriately to make a profit. A cash flow forecast should be created that predicts the sales as well as the profit and loss. The forecast of money coming in and going out of the business can be done easily.

6. Funding and finance

CHALLENGE: The cash flow can be managed by securing funding, but raising finance can be challenging and it can be hard to know where to get cash for the business idea.

ACTION: The types of funding open are to be researched extensively and the information that one would gather needs to be shared with investors, such as a business plan and cash flow forecast. Government-backed Start Up Loans provides unsecured funding at lower interest rates than from other lenders.

?7. Hiring the right people

CHALLENGE: The people one recruits as employees can affect a start-up’s success. A negative employee can quickly damage team morale and productivity. It is difficult to fire someone but having the wrong people in a start-up can be very disruptive.

ACTION: Time should be spent to find the right person. People who share similar values and have valuable experience should be considered. Once a team is formed, an open and transparent business culture should be created. Encouraging clear and open communication with the staff can help[ the owner understand their strengths and weaknesses. This may also help to deal with staff issues if they arise.

If one plans to pool in a co-founder, he must keep in mind that unless he has a working relationship with someone he trusts and someone who is willing to join the startup, an effective way to find the right co-founder is by starting with a partnership that can later turn into a co-founding relationship. This partnership period allows one to get to know the person professionally and on a personal level.

?8. Leadership

?CHALLENGE:?As a start-up grows and a team is built, the employees would look to the leader for strong leadership.

ACTION: The business’ mission and vision should be clearly stated and communicated to the employees. Employees should understand their objectives, the company’s overall goals and be fully on board with the direction the business is taking. One must ensure that the staff remain motivated and be sure to look after their wellbeing.

9. Time management and productivity

CHALLENGE: Managing time effectively is crucial while launching and operating a start-up. New business owners might get overwhelmed and?can get distracted and focus on the wrong areas.

ACTION: Planning is vital as it helps to keep a track and focus on the goals. One can easily end up working in the business rather than on the business, so dedicate a set amount of time each week to reflect and analyse areas that need attention.

Using time-management apps should be considered to create lists of tasks one can tick off as things progress. If one has an important task to complete, a quiet area is needed to do it. Disturbances and distractions should be avoided and thus email, app and messaging notifications should be turned off.

Outsourcing tasks is another way to manage time better. For example, rather than building the website or managing the tax returns, handing it over to a web designer or accountant can be a more efficient and cost-effective decision.

10. Impact on your health

CHALLENGE: Running the business is not like having a traditional corporate job. Without care, it can be all-absorbing and take over the entrepreneur’s life. He needs to take steps to safeguard his mental and physical wellbeing.

ACTION: Enough sleep and regular time away from work are extremely important to maintain equilibrium. Having breaks during the day, eating healthily and getting regular exercise leads to a disciplined work schedule. Having a co-founder helps share the load while joining networking events and business groups can give access to fellow business owners who face similar challenges.

When one starts a small business or launches a startup, the one thing he can count on is the unexpected. No matter how thoroughly one plan, forecasts, and tests, problems are bound to arise. This is why as an entrepreneur, one needs to know how to solve business problems effectively. There is no single challenge that can stop passionate entrepreneurs from successfully launching a startup. First-time and experienced founders face these challenges along their entrepreneurial journey. None of these or others are impossible to overcome at a go. Startup success is the sum of small wins and thus one should take it one step at a time.

To approach problem-solving successfully, one needs to establish consistent processes that helps to evaluate, explore solutions, prioritise execution, and measure success. In many ways, it should be similar to how one reviews business performance through a monthly plan review - he works through the same documentation, looks for gaps, digs deeper to identify the root cause and chalk out options. Without this process, one cannot expect to solve problems efficiently or effectively.

While some would say problem-solving comes naturally, it is actually a skill that one can grow and refine over time. Problem-solving skills would help the leader and his team tackle critical issues and conflicts as they arise. It starts from the top. The business owner or CEO needs to display the type of level-headed problem solving that one expects to see from the employees.

Doing so will help the full team quickly deal with issues. The key to effective problem-solving in business is the ability to adapt, establish and refine a problem-solving process, turn challenges into opportunities, and generally keep a level head. The best business leaders do not have any magic solutions to solve their problems, they build processes and leverage tools to find success. Any ambitious entrepreneur would succeed as well.?