Six grave problems encountered by start-up businesses

Starting your own business could be exciting and enthusiastically satisfying; however, it could be a roller coaster for you as you encounter problems you never anticipated. Thousands of businesses are born every day but tend to shut down within months. In its initial stage, a start-up can encounter a zillion problems such as finances, competitors, legalities, etc.

Keep your project from dwindling away by making yourself aware of some of the probable yet avoidable problems that can come in the way of the progress and advancement of your start-up business. After extensive researches on the problems faced by start-up businesses, we have collated a few common problems and their solution that could help budding entrepreneurs avoid these problems.

Problems with Cash

Close up of businessman holding a clock and one stack of cash in

The next thought that pops-up in your head once you plan to start a business is how you would arrange for finances and how to organise the day to day cash flow. A new business requires immense marketing and initial investment in assets, building and infrastructure, manpower and the list is endless.

Owners of small businesses draw their personal savings to fund their business which might be good option at times but they normally end up draining themselves, and things get problematic soon. According to a study, if business owners borrowed from bank they only took what was necessary to fund their business and start it up instead of thinking about the worst scenarios and borrowing accordingly.

Since many business loans are available at fairly less interest rates exclusively for budding entrepreneurs, it is advisable to consider all options before applying for one.

Poor Marketing


The normal thinking of a new entrepreneur is that if his/her product is marketed well, his company will work well. It is true; however, it doesn’t mean you invest in marketing blindly.

Advertising and marketing are one of the most cash draining areas. Printing, local or national advertisements are very expensive and people normally tend to invest most of their cash in them without doing proper research. You need to do a lot of initial research before you start advertising or marketing to ensure that you are marketing for the right demographic, else all your money and efforts will be in vain.

Handling it Alone

Business lady

While starting a new business, most people think it to be a good idea to run the business single handed. While it may sound exciting to have all the profits for you, it is not as easy when it comes to implementing it. Many wish to avoid the disagreements that could creep among partners when handling the business. New business would require a lot of time. Having a help you will get advice in taking some crucial decisions for the new business.

Although most of the new businesses would not necessitate any full time employees but having at least two people to help you initially would be a good idea. Legalities and finances are important especially when the business is new for you and you still need time to understand it completely. Keeping in mind the two most crucial areas where help could be required, you should opt for a lawyer and accounts guy. Remember experience and dependable support is always essential for entrepreneurs.

Difficulty Scaling Up

Beautiful blonde business woman is thinking about optimisation of the business process. A concept of business management solutions. Golden gears as a cloud.

Even when the new businesses are picking up pace and trying to match up with the competitive market, they suddenly tend to be taken aback when it comes to the responsibility of scaling their business up. Mostly the owners don’t have a plan or some of them get absorbed in the attempts to raise funds for the expansion.

Early stages of business profits are enticing which keep the owner wanting to scale up their business. However having an effective plan in place is when you should decide to scale up. Realizing that too much cash and constrained external control in the beginning could deprive you of the happiness of enjoying your young business, you need to “Strike when the iron is hot”. Strategy like this will definitely prove beneficial to your business. When your product is scalable and you can afford to have a cost-effective sales department in place, it is the right time for you to scale up your business.

Poorly Priced Products in Market

lower costs

You might think your product to be the best but there are many companies who are providing the same product at lower rates. There are international companies, who get products at shockingly low prices because of the large quantities they purchase in, because of the supplier contracts. Budding companies accordingly tend to lower their product prices so that they can pick up on their sales. This however may not be a good idea as you might incur losses in long term and your cost of production may not be recovered.

List reasonable retail prices and make sure your business provides excellent customer service. Believe me customers are willing to pay a little more if they get a reliable product and good customer service. Make sure you can reach your customers on time and your work timings suit the overall customer requirements.

A Weak Team

Business group

Good team work can reap wonderful results within months of your new set up whereas having a weak team could pose a great threat to your new business. Most teams are often weak on building strategies to market and promote a new product. The product they make is not up to the mark for customers because they failed to do proper research and reach out for their feedback before they made the product. Poor execution either gets you a poorly made product or a delayed delivery. The execution of launching the product is also ineffective and fails to get the customers attention.

Therefore, while hiring employees for your business you select only the best of the lot. Initial stages of business might not allow you to have the best man in your business but you would probably lay your hand on affordable, new hidden talent waiting to be explored who could do wonders for your start-up. If you think you would not be able to chunk out the best, you could always take external help from a friend or consultancy.

Having said all of this, you should also remember to be sanguine, enthusiastic and have the “never let go” attitude when you are starting a new business. These virtues will always help you come out of any hardships that you encounter while commencing a new business for yourself.

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