Whether you’re currently building your Startup or have yet to create one, your business model, products and services are likely at the forefront of your mind.
While startups fail all the time, it’s often for a few common reasons – many of which have little to do with the aspects of your business you’ve spent the most time developing. The following are four problems your startup will face, along with how to avoid and resolve them.
1. Failing to Perform Proper Market Research
The truth of the matter is that many businesses fail because the market doesn’t support them. Essentially, you must ensure before making any moves that your product is in high demand by buyers. For example, it’s not wise to open a Mexican restaurant in a small town that already has ten of them.
Find out what the market is asking for and drill into those leads for more information. You essentially need to know that your target customers really need of your product.
2. Meeting Increased Demand Without Sacrificing Quality
If your startup performs well, the time will come when the demand will increase for your products. As businesses put out higher quantities of product, quality is often sacrificed for the speed. To prevent quality loss, despite increased demand, implement a quality control process.
Either assign an employee to look over finished products each day, or hire a person to oversee operations on a continual basis. You might spend a bit more on the new employee, but you can rest assured that the quality of your product doesn’t diminish, regardless of the new quantities you’re putting out.
3. Weak Management Team
Often times, startup management teams are comprised of the one or two people that were there from the beginning. These same people often don’t have the skills or experience required to develop products and make sales. They sometimes do not possess the skills to coordinate execution, develop viable strategies, or manage other people.
If you want solid management and organisation over your business processes, hire someone that is experienced in doing so. You’ll save money in the long run, and you could even prevent your business from going under.
4. Money Problems
There will likely come a point, when your startup is just taking off, that you will run into financial problems. Unfortunately, there’s a strong chance that your business will run out of money at an early point. You can preserve money for your business by doing things like only hiring experts when you absolutely need them and avoiding purchasing supplies in bulk if your demand doesn’t support it. Keep a close eye on costs and your cash flow!
Before you kick off your startup, ensure you can make at least a five year financial commitment to it.
Source: Business Achiever