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

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.