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8 Common Problems of Startup Business

Startup business common problems

“What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed.”  –Dave Thomas, Founder, Wendy’s

Every business faces many challenges as they continue venturing into their chosen industries. Anticipated or not, companies should always formulate the answer to every question and the solution to every problem that their business encounters.

Regardless of how big or small the obstacle is, every startup must have the capacity to overcome these hurdles. Every enterprise encounters problems and that includes startups. Startups struggle for many reasons.

In some cases, these struggles can be highly difficult that it could even lead to the closure of some businesses.

Starting and running a business entails a level of preparedness and endurance that can thrive in a cut-throat industry where “survival of the fittest” is the general norm. 

While the belief and notion that only the toughest survive, and the smartest succeed, it would be unfair to deem startup businesses as the least competent in surpassing the big and small challenges of managing a business.

In order to help business owners of startups gain a better analysis of how they can keep their business failure-proof, identifying the most common problems faced by new ventures is a good start.

Below are the 8 common problems that startups come across as they continue to develop and strive for bigger success:


As Richard Harroch, a venture capitalist and author would say it: “It’s almost always harder to raise capital than you thought it would be, and it always takes longer. So plan for that.”  

Funding will be a headache in the early years of a business and during the expansion stage. Financial management will be crucial to business owners.

Startups should always keep in mind that being a new name in the industry, an imbalance of cost, capital, and profit will be normal during their business’ initial stages. In other words, they must imagine and expect having to release capital without the expectation of gaining profit, yet. 

During this phase, cash flows can possibly be continuous. It is best that businesses prepare for such a situation in order to avoid failure. To be specific, here are some of the things that may acquire a portion of every startup’s funds:

  1. Hiring staff
  2. Building a physical store and adding new offices
  3. Purchase relevant software for the service or spend for product development
  4. Invest in marketing strategies

When one or more of the above are left unanticipated, it can cause delays in rolling out products and even lead to the removal of a huge chunk of the company’s employees.

During startup, owners need to exert all efforts to minimize their cost to prevent these unfortunate events from taking place.


Every business owner’s dream is for their company to grow. Thus, expansion is not really a problem but rather an accomplishment and a challenge. Expansion is a sign of growth and development for a startup.

Every accomplishment has a responsibility and challenge coupled with it. During expansion,  owners should expect that additional capital will be needed because companies will be needing new employees, new office/s, more supervisors (for their HR and admin departments, for instance), and some may also consider putting up other offices abroad or in other cities.

Unfortunately, problems emerge when some startups cannot cope with growth. Planning and financing is crucial for businesses to be able to expand properly.


The problem with startups and marketing is that there is a tendency of failing to understand the true importance of a well-defined marketing strategy to the company’s long-term success.

At times, owners exhaust energy on aspects that are unnecessary to the business’ development and branding. Without effective marketing tactics that will help boost the brand and entice customers,  introducing the startup’s services and enhancing its features will be useless if there are no customers to patronize and support the business.

Some startups fail because they neglect the significance of marketing. Often, businessmen fall under unrealistic expectations that their startup will grow eventually and naturally. Worst, some rely only on word of mouth and the idea that their business will eventually grow as the years go by.

The best way to get started with a marketing strategy that befits the startup’s goals and progress is to locate a specific target market, provide opportunities for customers to gain higher familiarity with the brand’s products or services, gather valuable feedback from new customers and use it as a reference to improve the product or service and devise ads that will speak more personally to customer needs.

In this manner, not only will onlookers be transformed into actual customers, it is also more possible to earn their loyalty. Winning the trust of customers is the goal of every business—a feat that becomes harder to attain without the help of a suitable marketing approach. 


Forgetting to establish a concrete business plan is a rare occurrence for business owners. Even so, there are budding entrepreneurs who commit the mistake of skipping this vital step, thinking that they can simply craft a plan as they go along managing their newly opened business.

A business plan serves as the backbone of every company. It will be the guiding platform towards achieving the company’s goals and targets.

Another possible scenario is that some owners have indeed created a plan but failed to consider all the important factors of sustaining the business and keeping the products up-to-date with changing customer demands and industry trends. 

A good business plan must anticipate all positive and negative possibilities that the enterprise might encounter. Among the crucial factors that should be included in a business plan are:

  • Sales
  • Development
  • Staffing
  • Skills shortage
  • Funding

Business owners, as the leader of a company, must refrain from unrealistic expectations. Optimism alone does not always imply positive results. Instead, business owners should practice smart optimism. In addition, startups will most probably succeed if can handle challenges well.

During planning, business owners and their team should make sure that the plan will be ready and flexible enough should there be any unanticipated problems.


The workforce will be the key to business’ growth.

Hiring people to help business owners attain their objectives is a critical decision to be made. They should be able to find suitable candidates for each and every position to be filled. 

Reviewing the business plan and locating the skills needed in operating the business is a must. It is likewise vital to know where to locate or find candidates bearing the skills and qualifications that the startup needs.

Every business requires a particular set of skills that will aid in its success and progress. That said, owners must avoid hiring people not fitted for the job.

A tip for startups: Don’t hire people with the same skills. Rather, create a group composed of a variety of talents to complement each other.

In addition to fostering diversity in the workplace, supervisors and team leaders should also be able to create a company culture that will allow staff to work together harmoniously in attaining the company’s objectives.

Delays should be avoided at all costs because ideally, startups must have no room for delays. Hiring the wrong people may cost the company more. It will be a wasted investment and will ultimately lead to the startup’s downfall.


Before considering working hand-in-hand with a fellow business owner, owners of startups should reflect on whether a partnership is an immediate requirement for the business or not. If it is,  then it must be secured that the partnership that will be established benefits both parties.

Not all business partners are helpful. At times, there are business partners that become the source of delays in carrying out campaigns and strategies. This is often the scenario for when the partnering business lacks the skills and resources needed to make the partnership symbiotic.

Every business or business owner has their own share of selling points. However, business partnerships should only last for a specific duration in order to maximize what the collaboration aims to achieve. 

More specifically, a business partner may have helped in developing the company’s main lineup of products but may not be the best fit for providing resources and references to enhance leadership in the partner company’s work environment.


Several of the successes behind the most sought after brands of today are the result of hard work and not of status, fame and/or existing wealth.

Budding entrepreneurs should be knowledgeable that leading a company does not end in conceptualizing alone. It also requires them to act outside of their comfort zone.

At first, it may seem as though preparation alone will help them make the cut, but the harsh reality of opening up a business is that sadly, not everyone simply has what it takes to emerge and make a name for themselves in their chosen industry,

Startup owners must ask themselves first how far they are willing to push themselves to attain their vision and goals. They must also reflect on whether they are capable of actually going out to approach and entice clients and present themselves and their business to potential leads.

Some startups also fail because of ineffective management. Knowledge, skillset, and passion is not enough for a startup to thrive.

Sometimes, the assistance and input of experienced mentors are needed in operating the business. Business mentors help entrepreneurs with great ideas devise better marketing campaigns and learn more about the trends in their industry of choice.

Their wisdom enables startup owners to see the bigger picture and enforce management approaches that highlight the unique culture and branding that they want for their business.


The reality that established and new competitors are present everywhere is perhaps the most crucial challenge that every startup has to face. As a starting business, businesses are yet to establish their name within the pool or many other better-known firms in the industry. 

When competing against a well-established business, startups often focus on how to prove their relevance especially if they share the same target market with their big-time competitors.

After all, why should customers try a new brand when they clearly already have a business or company that they patronize? During tight and tricky situations like this one, startup owners are advised to be assertive in obtaining recognition for their brand. 

Customers may have brand loyalty, but it is also undeniable that some will not be afraid to try something new. In fact, there are customers who wish to go against the norm and go for something that none of them has ever tried before.

At the end of the day, customers are more impressed by brands that exude authenticity, perseverance and ingenuity—qualities that are usually more likely to be exhibited by new and humble companies.

Startups should always take note that there is not enough time in business to sit back, relax and wait for things to fall into place.

They must learn how to manage their resources well and seize a good opportunity when they see one. More importantly, startup owners must always be on the lookout for changing business trends, as it will help them make more viable decisions for their company.

Try to minimize all factors that could possibly delay any progress, and above all, set clear, realistic priorities.

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