Year 3, the bottleneck!

Many startups struggle after year 2 of their operation, that is very common as it is usually the make or break year. When the struggle begins, the Managing Director needs to take a back seat to review the following five parameters. A few simple questions must be answered on each of the parameters to decide on the way forward.

1-     The Market: Is there a market for your product? What is the size of the market and who are the main players? Is the market growing?

2-     The Tools: Were you using the right tools for the past 2 years? What are the changes you need to do to be more efficient and competitive? Is your office/workshop in the right place or it would make a difference if you move?

3-     The Team: Is the team capable of giving you the products you want? What are the missing competencies in the team? Are there changes needed to the team and what would be the plan to do it?

4-     The Pricing: How is your price of your product perceived by the market? Where does it position you? How is compared to competition?

5-     The Finance: How is your cash flow doing? Do you have access to funds to do the necessary changes coming up from the first three parameters? If you stop now, can you pay back your loans and return the investments done by your investors?

Discussing the answers of these questions with a small team of professionals, whom are not part of your team nor your investors, can really help you find your way out and cross the bottleneck. This exercise should be done every two to three years depending on the industry. It's a very important to get a neutral and different opinion from the ones you get from people inside the company circle. Having different points of view away from people facing your day-to-day challenges with you.

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