5 Most Common Challenges Of Startup Companies

The journey of corporate growth is a complex and swerving route full of surprises inside and out. While we do not use the word ‘impossible’ at Ditch Labs, there are many challenges that we have faced in the past and that we continue to give onto on a daily basis. Amongst those challenges, most of them are quite common! Consequently, this article discusses 5 of the most common challenges that startup companies face and some ideas to overcome them.

Finding “the right” idea and embracing change.

Coming up with ideas is a common practice. And choosing an idea may not always be as complicated as it seems. But pursuing an idea based on research and our interest may not always be the right formula because products change based on customer response and feedback.

The idea of a startup is the starting point and it might change during the process. Although change is almost inevitable, there are things you can do to minimize it. Tackle a small market, identify the right problems, and profit off of eras instead of trying to create them (many startups and businesses became successful as a result of the pandemic). You cannot fit an unwanted solution into people’s lives. The right idea is a product that people need and recommend.

Hiring the right people

The people you hire will shape and define your corporate culture. This is a crucial factor and especially in startups with limited resources. The synergy of your team is therefore an essential asset. Some teams are highly versatile, some have similar capabilities and others have very specific expertise. Choose your team wisely according to your needs.

There is a huge pool of aspiring individuals and potential candidates available. It is important to choose the suitable ones as the future of the company depends on your skillset. The selection criteria are changing with the digital age and matching that change with your needs in thought of your future plan will go in your advantage.

Limited resources

It is true that you can do a lot today with a laptop and a few resources. The COVID-19 pandemic caused the rise of remote work and made the office an option in 2022. The world is getting smaller everyday as the internet grows. However, startups usually have more limited resources. Skillsets and technical knowledge also take part in the resources that are crucial to corporate growth. While technology is also open and accessible, it takes more to manage, build and run a business. Luckily, you can find and hire those skills online.

Financial resources are as important for startup companies and while many are bootstrapping to run their business, time is a currency that comes into play when trying to minimize costs. That time could be invested in learning the necessary skills or even realizing the task with low- or no-code tools regardless of your background.

Each year, over 500,000 companies are started in the US. Of these, venture capitalists invest in fewer than 1,000 per year, plus Angels and Angel Group in roughly another 30,000 startups. That gives you an idea of how much funding is available. Moreover, the funds focus mainly on earlier stage startups. The point is that all companies face capital constraints. Limited resources is a common challenge faced by startups but it is important not to bet everything on venture capital as it is not the only form of funding. Find the formula that works for you in cases of surprises and capitalize on it.

Ineffective marketing

Your product makes your business exist, marketing makes your business exist for other people. Marketing is a crucial turning point in your business because it will determine the return on investment that you are hoping for. Thus, marketing can often be ineffective, many businesses spend lots of money on marketing techniques that end up costing more than the sales generate.

Your marketing needs to be smart and accurate. Good marketing campaigns have plans that determine how they intend to reach their target audience. There are low-cost or free ways to reach your audience. Release relevant content and be consistent. If you have the funds, think about investing in more powerful tactics or outsourcing to a marketing firm or expert.

Financial management

Startups heavily rely on investors. They face various challenges but one that often comes back relates to financial management. In between cash and staff influx and the fluctuation of project runways, finances always need to be kept track of as many businesses sink from a lack of financial management.

Having the right corporate strategy is therefore a must for your business’s development. There are some corporate strategists on the market, but if this is not an option for you, play a safe and cautious hand. Working with a good financial consultancy firm can also come a long way in facing financial management challenges as a startup today.

Not every startup is meant to prosper, but the ones with the right tools and resources significantly increase their chances of success. Be patient and allow your business into the process, even if it requires more investment because no one knows it more than you that it will come a long way.