5 Big Problems to Look Out for in Your Startup's First 3 Years

Two years after Chinenye Odum opened her bakery, things are not looking as bright as she had projected. Demand for her cakes and other pastries appear to be falling and yet costs are rising. She has watched her bottom line slide into the red and is worried that her business could be heading for the rocks. According to experts, startups have a zillion problems to counter and overcome -- the intense competition for customer, market and venture capital money, the list goes on. And many companies are falling behind. Keep your venture from becoming one of the walking dead by staying aware of these predictable -- yet preventable -- problems that can affect its growth and development. 1. Failing support Recent studies show that most startups and small businesses are financed by the founders’ savings. According to a report published by Gallup 79 percent of those who started their small business (with five or fewer employees, including themselves) have drawn on personal savings to fund their dream. This might seem healthier than taking on additional investment and loans, but if the founders don’t enjoy a good financial situation, things will get worrisome in no time. 2. Difficulty scaling up Many small businesses and tech startups are caught by surprise when they're successful. Many have no plan in place to scale up responsibly and effectively, and others get swallowed up in attempts to raise funds. Realise that too much money and stifling external control in early stages might rob you of the joy of nurturing your fledgling business. If you have achieved productmarket fit, have a scalable product and a smart and cost-effective sales channel in place, then it’s the right time for you to scale up. 3. A weak team A talented, passionate and responsible workforce forms the basic foundation of a successful startup. So right from day one, your aim should be to hire and train the most