Problems Startup Faces

Problems Almost Every Startup Faces

Did you know that about a half of small businesses fail in their first four years? So, the odds are 50:50, right? More or less, this is not a lottery game, and success doesn’t come as a result of being lucky, but thanks to knowing how to handle all the challenges being thrown at you. And those challenges can be overwhelming, from establishing a business in the first place to keeping it running and profitable for an indefinite period. Of course, the best way to address a problem is being prepared for it before it hits you and knocks you down. So, here are some key hurdles every startup is bound to face and methods of overcoming them.

Cash flow problems

According to the U.S. Bank research, more than 80% of businesses fail because of cash flow problems. One of the reasons why that happens is a poor understanding of the very term. You see, cash flow is not just an amount of money that comes in and out of your company, you have to count in the timing, too. If you are working with an invoicing system, and your invoices are not paid by the time you need to pay your loans or your employees, you will end up with a cash flow problem. This problem can be addressed by hiring a bookkeeper to keep your cash flow in check.


Competition is inevitable in the business world, and sometimes it can even be useful for driving you to become better at your work. However, new businesses often land in a huge bully-filled playground with their competitors already having the upper hand because they have been present for some time. Don’t allow yourself to be discouraged by such circumstances. It would probably be best to do thorough market research even before you establish a business, but if it’s too late for that, at least always try to do better than your competitors and create a great marketing strategy – use the appeal of being a new guy in town.

Copyright issues

You’re probably wondering how a problem like this has found its place on this list, but you would be surprised just how many startups are falling for this trap. Even Forbes listed intellectual property protection as one of the greatest legal issues startups face. This area is wider than copyrights and it includes patents, trademarks, service marks, trade secrets and confidentiality agreements. Most of them can be solved by hiring a legal consultant. As far as the images or illustrations you will use for ads and blogs are concerned, you can find a lot of quality stock imagery for startups and avoid a lawsuit.

Poor management team

So, you’ve just started your business and you need to hire a management team? Usually, at the very beginning, you still don’t have a lot of cash on you, and you hire anyone who is willing to work for a low wage and overtime. However, this is not the area where you should save money. A poor management team will build a poor product, make bad decisions and even worse executions and build weak teams below them. All of this together will lead to a chain of errors, which will take your company to its inevitable failure.

The team is not getting along

We get it: a work team isn’t a family. However, a team that doesn’t get along will not be able to execute their tasks efficiently. It is difficult to put together a bunch of people who have never before worked together and who have different personalities, experiences and ambitions. As the top executive, it is up to you to communicate with them, see whether their differences can be resolved for the good of the company, organize team building exercises or, eventually, say goodbye to some of the members.

Sales aren’t meeting your expectations

When you’ve first started your business, you’ve probably made some sort of business plan where you projected how much you will spend on a product and how much you will earn from sales. However, you didn’t count in that customers are usually slow to accept new products from unknown startups. There are two ways to address this issue: market research and marketing (including online and guerilla strategies).

These challenges are scary, but they should by no means be immobilizing. You should know that while almost every startup faces one or more of these problems, what separates the ones that succeed and the ones that don’t is how they handle them.

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