Common Challenges Faced by New Startups
As technology advances and new markets emerge, thousands of new startup companies are bringing innovative ideas to life on a daily basis. Due to fierce competition, simply having a good idea is not enough to succeed. While all startups face challenges, the ones that can overcome these early obstacles have a much better chance at long-term success. This article will explore some of the most common challenges entrepreneurs should prepare to face during the early stages of their new startups.
Alexander Djerassi acknowledges the biggest challenge faced by new startups is securing and managing all the necessary financial resources. It’s one thing to have a great idea, but without adequate resources, any new company is destined to fail. Securing funding can be extremely challenging for new business owners, because they have trouble raising enough capital on their own, investors may be hesitant to Believe in a new idea and banks may be unwilling to loan money to entrepreneurs without a proven track record. Those who are able to secure funding early on may still face challenges, because they are often starting out in debt and need to allocate resources in a way that maximizes profits and minimizes future deficits.
Another major challenge faced by startups is market competition. Along with coming up with a new idea, start up companies need to accurately identify their target markets and determine which features set their business or product apart from the rest of their competitors. Even brand new ideas can be difficult to market in competitive industries, because well-established companies are often able to develop similar products, offer better price points and reach larger target audiences.
Alexander Djerassi points out another major challenge to new startups is finding and hiring the right people. The team a company builds around its products and vision is extremely important, because without proper direction, an idea is just an idea. A lot of new companies think they need to hire as many people as possible in the early stages so more work gets done more quickly. However, in reality, the startups that are able to succeed long-term hire individuals who meet their needs, fit their culture and share similar goals and visions.
One more common challenge faced by new startups is effective time management. Even after funding has been secured and the right employees have been hired, many new businesses still struggle with spending the right amount of time on the right processes. In order to compete long-term, companies must be able to adapt and evolve within fast paced environments or risk getting left behind. Because there are only so many hours in a day, it is crucial for new startups to identify important areas of need and allocate the proper amount of time to those projects. Along with time management within the company, new entrepreneurs also need to be cognizant of their time management outside the workplace. In other words, it’s important to create the proper balance between work and life in order to avoid being overworked before a new company gets the chance to develop into something special.