While everyone desires to have a business of his own and become the master of his destiny, it is well known that establishing and successfully running a startup is anything but easy. Not only do budding entrepreneurs need an innovative concept that can meet unfulfilled consumer needs but also, they must have access to adequate funding, and be able to formulate and implement marketing strategies that can stand out even in the face of high competition. With only around half of businesses reaching the 10-year milestone, startup failure is more common than thought to be. Some common entrepreneurial challenges and their solutions:
Lack of an Addressable Market
One of the biggest reasons for startup failure is that the potential of the market is simply not large enough to sustain the business. It is very easy for a young entrepreneur to get carried away by an idea he considers brilliant and transformational, however, there must be enough customers who will be ready to lay down good money for it, in short, there must be enough perceived value addition for the idea to be commercially successful. To prevent a situation where there is a lack of demand for the product or service, it is vital to carry out thorough market and competitor research. The more you understand about what the target audience wants, the more you will know whether your product has any real value to them.
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In the very early stages of the startup, the entrepreneur can get by with personal savings or contributions from family and friends, however as the business grows this will be grossly insufficient. Entrepreneurs will need to have a clear plan that can provide credible estimates of the funds required at the various stages and will need to approach banks and other sources of capital at the right time to ensure that the growth can happen as per plan. They will need to convince financiers that there is enough market potential for the product and that the business model is workable to get access to the funds at the right time. Demonstration of strong and sustainable cash flow is also a very important factor that will help them to obtain the necessary funds.
Inability to Manage Time
Setting up a startup can be crazy because of the large number of variables and the many unexpected obstacles that entrepreneurs will have to tackle every waking minute. Right from arranging the production to hiring staff, negotiating with vendors, dealing with quality issues, arranging for regulatory compliances, and negotiating with tough customers, everything will need immediate and constant attention. In this kind of a scenario, managing time can be impossible, however, if it cannot be done, more problems will appear as important tasks may get ignored. Prioritizing the work, delegating work, and managing time efficiently are the keys to success.
Startups become successful when entrepreneurs display both the foresight and the discipline required to manage a large number of extremely dynamic variables. By being able to gauge the size and potential of the addressable market, putting in place a viable business model, arranging for the necessary funds in time, and managing time effectively, they can increase the chances of commercial success significantly.