Top 5: Start-Up Problems & How to Fix Them

Whenever someone launches a business, the hard reality is that while some will swim, others will struggle and ultimately sink. Turning a start-up into a healthy business, let alone a thriving one, is no easy feat. 

No matter the industry, every business will encounter hurdles at some point or another. With that in mind, rather than diving headfirst into your start-up, it’s important to firstly address several common problems that could strike, plus how to combat them.

1. Poor Market Research

It’s unlikely that any veteran of the business world would advise any generation of young entrepreneurs to swing the proverbial bat without getting a good look at the ball their trying to knock out the park. In other words, they’d tell them to seriously research their chosen market and potential to succeed.

It’s like jumping into water in darkness – and just hoping it’s a puddle instead of a shark infested tank. So, before you get the ball rolling, be sure to do any necessary research; understand your market, competitors, target audience, and of course your product/service.

If you dove straight in without doing any research, however, then it’s not necessarily the end of the world. Just remember to start DOING the research. Explore everything, especially what your competitors are doing, how they’re doing it, and how you can improve upon their offerings.

2. Poor Business/Marketing Strategy

Marketing is everything. Well, not everything – but it kind of is. Especially in today’s world. Many people have had great products, services and ideas at some point or another, but their businesses never made it off the ground. And often the reason was because nobody knew they had something special to offer.

Word of mouth can be great, but every start-up needs a bold, clear, extensively researched marketing strategy in order to chase down the optimal results and success they set out to find. However, if, like many new businesses, you don’t have the money to launch a big marketing campaign, how can you spread the message about your products and services?

Luckily social media has revolutionized the way companies market themselves, no matter their size – which means start-ups can take full advantage of many platforms, often at minimal cost. Just be careful not to expand your business too fast (more on that a bit later). 

For instance, if your website/store did receive a surge in customers, could your business handle the workload? Could it supply the extra demand? And would customer service remain satisfactory? When it comes to posting about product updates and offers, etc, remember that this requires planning and creativity. So how much time can you realistically spare for managing social media?

Also, don’t forget that it’s vital for your business to have strong leadership – and that it’s alright if you aren’t the person to fulfil that role. Sure, you may well be an expert when it comes to your product and area of industry, but it’s important to understand that not everyone can be an ‘effective’ leader.

Of course, if recruiting additional staff just isn’t feasible at present, then you’ll need to step up and deliver in the best way you can. Don’t let pride stand in the way of asking for help; developing new skills will not only build upon your existing knowledge, but will also strengthen your resolve. Insight into roles outside your comfort zone can never be a bad thing.

3. Lacking the Necessary Funds

It comes as no surprise that the lacking of funds features on this list. Funding issues are extremely common for start-ups. Most entrepreneurs set out with a clear goal and admirable determination, yet are constantly fighting to survive and steer clear of the red.

Once again, it’s all about getting the necessary research done before your horse flies out the gate and is let loose on the track. Every business needs funding, and many of them will need to secure it from a lender via traditional loans, overdrafts, credit cards, or more flexible funding solutions like independent finance brokers.

The key is to weigh up as best you can what the most appropriate facility for your start-up is. Remember that while solutions like credit cards and traditional loans are great for giving your business a quick cash flow injection, consider how you’ll fare in the long game when it comes to continual borrowing and tackling interest payments. 

Also, to help prevent financial ruin from late payments, it’s vital to implement a solid credit control procedure in order to ensure your business gets paid exactly when it needs to be. Those that wish to concentrate their efforts on growing their start-ups can benefit from outsourcing credit management to load-lightening experts.

4. Expanding Too Fast

Every entrepreneur dreams of building their business from scratch into a huge success. But how fast is too fast? And when is too big too soon? Well, every business is different, and so that’s a question you’ll have to figure out on your own or with your team.

Of course, it’s not that your dreams and ambitions are misplaced – instead, it’s simply an issue of cash flow once again. It’s like trying to lift some of the heavier weights at the gym, even though you’ve only just become a member. Not exactly a good idea, right? Disappointment, injuries, etc…

Biting off more than you can probably chew – like diversification and additional sales – will lead to increased workload (can your staff, overall company skill set and equipment cope?), while investment could also cause cash flow issues. If you can’t deal with it, what then? 

One solution to help ensure that you fulfil new sales and contracts without running into cash flow hurdles is Factoring. It’s effective for start-ups because it releases cash against the value of invoices as they’re raised; cash flow ticks over, so funding builds in line with the business.

5. The Curse of Bad Luck

Plain old luck can occasionally lead to success, strife and failure. Sometimes the Business Gods are on your side. Other times they’re not. But we’re focusing on the bad kind here; and in the event it strikes, you’ll have unexpected world events like pandemics and economic change, etc, to thank for them.

By thinking ‘bad luck WILL strike’ versus ‘bad luck probably won’t strike’, this realist, forward-thinking mindset will allow you to come up with effective solutions and actionable plans way ahead of time. If your start-up does get hit by an unforeseen event, it’s a good idea to pump the brakes.

This way you can allow the situation time to breathe, and see how it develops in the coming days/weeks before you take any bold steps. Acting in haste based on a whim could have costly consequences, after all. If the situation does call for change, then try to embrace it, adapting where you can to diversify your trade, turning negatives into positives as best you can.