Have you ever heard the phrase, "a smooth sea never made a skilled sailor?" When it comes to business, and in this case, to startups, there's a long path full of unknowns during the launching and scaling process that can't be avoided.
You perhaps thought that just a groundbreaking idea or product would be enough to succeed, but unfortunately, it's not. According to several studies, so many startups fail due to a lack of market-product fit and not having the right people in the team.
However, these two are only the tip of the iceberg, and companies struggle with several other challenges. In order to overcome those hurdles and use them as an experience to learn and grow, you must identify what to expect. Even though bumps on the road are unavoidable, there's a way to overcome them successfully.
What are the Challenges for Startups and How to Overcome Them?
Assembling and Managing the Right Team
Not having the right people on board is one of the leading reasons why startups fail. There's no doubt that the team influences your company’s success (or not), and most entrepreneurs don't know how to handle a hiring process.
At this point is when the dilemma comes up. Assembling the best possible startup team takes time, but you can't afford to spend your valuable time in business development. However, the consequences of not having the proper people on board can be critical for the company.
Therefore, what's the best possible way to face this challenge? While outlining a business plan, consider talent-hiring as a part of it. Once you have determined your mission and goals, you'll know what skills and expertise your teamwork needs. If you still don't know how to shape a business plan, check this related article.
Related Read: Entrepreneurs and Innovators Need Lean Canvas Models for Their Businesses: Learn Why
Defining a Product that Fills a Gap in the Market
This point is quite complex because it's all about merging the gap between your product idea and what your target audience needs. Most entrepreneurs get stuck in their initial idea of the product and skip to develop a unique Product Value Proposition.
This step is essential to show what makes your company and its offer unique. At this point, you should be able to answer: why should people choose your product and not your competitors?
By performing dedicated research of your ideal customer, you'll detect the pain points of your competitor's products for the same segment. Outlining an Ideal Customer Profile is the best way to identify the audience you need to reach.
Financial Management
Financial mismanagement may drive a thriving project into a total failure or restrain business development and the product launch. Moreover, let us tell you that venture-backed startups also fail.
This usually happens because entrepreneurs underestimate the initial expenses of releasing the startup. Furthermore, those companies launched in foreign countries that look forward to expanding in the US will find that the operating costs may not be the same. For that reason, if you plan to scale your business and land in a new territory, proper financial management is key, and you should ask for external consultancy services.
Also, a smart move is to structure a financial plan that considers unanticipated costs and contingencies. Being financially prepared for the unexpected will minimize the impact on the startup growth.
Generating Brand Awareness
Brand awareness is essential to attract your target audience and make them trust you and your company. Simply put, if your customers don't know you, they won't buy your products. This point is the last on our list, but it's as relevant as the others. In fact, this is the spot where some items mentioned above tie together.
To outline a branding strategy, you need to have a skilled team of professionals, a peerless value proposition, and know your ideal customer. By combining these three elements, you can create a branding strategy that takes your business to the front row while building trust at the same time.
Complying with Local Regulations
This point may sound quite obvious for every entrepreneur. Of course, we know that every business that strives to grow and build a serious reputation will comply with local regulations. However, what happens when you decide to take your company to a foreign location? You'll find that tax regulation and legal implications are different, and if you want to expand your business successfully, you should be aware of all of them.
Consequently, you should review all the startup financial structure as it may experience significant changes due to the new legal and tax regulations. Therefore, perform complete research of the location where you plan to land and don't hesitate to request legal consultancy services.
Is Your Company Prepared for Facing These Challenges?
Challenges when launching a startup are inevitable. The point is, how do you plan to overcome them without making a misstep that may lead to a major failure? Founders need clear information besides just a good idea when starting a new business. As we mentioned above, the reasons why startups fail are a combination of circumstances led by the lack of product-market fit.
Entrepreneurs need a partner with a deep understanding of the US market and all the factors involved in scaling a business abroad. For that reason, Base Miami has developed a Market Fit program to help startups find their spot in the US and learn how things work in this new scenario.
Want to discover what are the benefits of being partners? Get in touch with us today and learn more about our 90 days proven methodology to accomplish in three months what usually takes 18-24. LET'S CHAT!
