Main Challenges That Startups Face and How to Deal With Them

Branding Challenges


Adrian Cruce

3 years ago | 4 min read

It has been said over and over again but needs to be memorized by every single person that wants to launch a business. 90% of new startups fail. This is a worrying statistic that becomes even gloomier when we consider that:

  • 20% of startups are closed in the first 12 months.
  • 34% of startups are closed in the first 24 months.

Only 25% of all startups end up being highly successful and are operational 15 years after launch.

Unfortunately, most new business owners are inexperienced. They do not know how to properly manage a startup. Usually, an idea leads to the launch of a new firm. Ideas are very powerful but only if the business management side of things is proper.

In order to be protected, you have to be aware of what can go wrong. This is why we should take a look at the most important challenges that startups face right now, together with some basic information on how to deal with them.

Financial Challenges

There is a pretty good possibility that you already know about this or you at least thought about it. In order for a business to run, money is needed. There is simply no way around the fact that cash flow has to be controlled.

A startup has to quickly build its regular income stream. Without it, variable and fixed expenses overwhelm the business.

Fortunately, most financial problems can be solved by building a solid business plan. This is practically a blueprint for all operations and even includes strategies that are to be used to achieve strategic objectives.

To increase the possibility that the startup will stay afloat, the business plan has to include checkpoints. These are used to evaluate progress and to properly budget all operations.

Remember that investor interest is driven up by methodical and careful research. If you want to acquire financing, the business plan has to be shown to investors. This is just one of the reasons why you have to be cautious with your business plan and take all the time needed to create a strong one.

Key Takeaway: If you do not monitor startup finances, it is a certainty that you will eventually lose control. This can only lead to bankruptcy.

Branding Challenges

You can have the best possible products and still fail when nobody hears about you or trusts you. This is where branding comes in to give a huge helping hand.

The problem is that many startups are so blindly focused on the idea and the operation of the company that they do not develop a strong brand.

The brand practically represents all that is positive when referring to services and products. It includes all that is related to the visual presentation of the company, ranging from company logo to website colors.

Key Takeaway: When you do not know how to build a strong brand, it is a very good idea to hire someone that does. If your branding is wrong, growth possibilities are drastically reduced.

Competition-Related Challenges

Every business has competition. It is very wrong to think that your product is unique and that is enough to generate interest. In reality, your product has competition and you have to be ready to deal with it.

Think about what makes the startup special. Then, make a list of your competitors. Use them as a benchmark for growth and development.

When mentioning competition-related challenges, we practically mean everything related to the relation between the startup and the competition. Some examples that can be mentioned are:

  • The product/service is priced higher than the competition.
  • The delivery network is inferior to that of the competition.
  • The social media presence of the startup is much lower than that of the competition.

These are obviously just some examples that can be highlighted.

Key Takeaway: When you underestimate your competition, you set yourself up for failure. When you analyze what the competition does right and wrong, you make the first step towards growth and survival.

Business Management-Related Challenges

Most people that launch a business lack the necessary business management knowledge to control operations. This is normal since they have other training. For instance, if you come up with an idea for a very useful mobile app, you know how to build it. But, you do not know how to build a business.

Unfortunately, management-related challenges are very difficult to figure out. You can rarely do it alone.

In order for the business to grow, you need to make sure the management team is good at its job. The startup needs a clearly-built and formulated management structure. Very clear authority lines have to be drawn.

Key Takeaway: You have to be honest with yourself in regards to your management experience. If you feel that you cannot properly manage the business, you have to hire someone that can.

Employee-Related Challenges

Most startups start as small operations. There are only a few people that do everything. In time though, more people have to be hired. This is where everything can go wrong fast.

The company has to hire the right employees in order to be successful and create much-needed synergy. During a startup’s infancy stages, all employees have to share a vision and be strategic. Without synergy, it is practically impossible to grow.

Key Takeaway: If you do not know how to hire the right employees, work with human resources specialists that can help you make informed choices.

Final Thoughts

Besides the very important challenges mentioned above, the startup can be faced with various other struggles. This includes cyber security challenges, not being able to reach the perfect target market, unrealistic expectations, not understanding limitations, risk management issues, and sustainability issues.

The road is always bumpy when you launch a business. However, if you are realistic about what happens and you are prepared for the future, the possibility of failure goes down. Always reach out for help when you need it and focus on learning as much as you can about how to make the startup successful.


Created by

Adrian Cruce

Marketer by day, gamer by night, human always!







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