What are the Biggest Challenges to Starting a Business?

Starting a Business - Complete Controller
Starting up a new business can be a complex endeavor. Even with a great product or service and armed with an efficient business model, business owners still face many hurdles to overcome during the initial years of operation: a period in which many startups fail. Learn about some of the most common challenges companies face in their first year and how you can overcome them. Check out America's Best Bookkeepers

Challenges for starting up a business

In an international survey, successful business personalities were asked about some of the main challenges they faced when first starting their company and how they overcame them. Listed below, we will discuss some of the most relevant and agreed-upon answers.

  1. Capital provision

The biggest challenge to any fledgling business is securing the capital necessary to assemble and develop the business.

Many banks are hesitant or reluctant to grant loans to newly developed businesses, so the venturer must raise money in other ways, usually through private investors. This is no easy task; rather, it is quite the opposite. It can be a challenge to secure a source or key partner with the necessary time and capital to develop the business model needed to start up the venture. Check out America's Best Bookkeepers

  1. Unpredicted revenue

Recession and economic crisis have the potential to damage any business. Few business owners anticipate the effects of the financial crisis, especially in the months just after creation. In this situation, many businesses take immediate action, such as developing their own website or reducing invoices, all in the hopes of balancing their cash flow. They also are comfortable with the reality that many more changes will need to be made to stay afloat. For example, this may include introducing or expanding on an online store, which allows for the addition of new products and services. Any sudden change in the economic condition of a country affects startups because their revenue is already unpredictable. Many businesses collapse due to the huge financial loss that occurs at the beginning of the business.

  1. An appropriate marketing plan

A proactive marketing plan can be an extremely positive asset to any startup. Many startups fail due to ineffective marketing campaigns. It is wise to allocate part of your budget for marketing, particularly in the beginning. When executed correctly, this investment will pay for itself in no time. 

  1. Creating and/or selling a unique product

Every startup seeks to reduce production costs, develop processes to organize the business, test new market strategies, etc. One of the best strategies, and perhaps the biggest challenge, is to create and market a new and original service or product.  Check out America's Best Bookkeepers

  1. Cash flow management

Having too much inventory can result in the loss of money. It is a great idea to redirect those production resources towards advertising, web development, or any methods of generating sales. In fact, the biggest challenge facing many startups is cash flow. Having limited capital restricts available time, so one must be very selective when determining how resources are allocated. This forces you to be creative when finding ways to produce at the lowest possible cost. Fortunately, social media has equaled the playing field for small businesses by providing a much more cost-effective means of marketing.
  1. Setting up a business with a reduced budget

When a company is initially formed, funds are typically limited to work and production. Due to the reluctance of banks, securing capital can be challenging. Add to this the need to hire staff, as well as rent a workspace. All this contributes to the cost of the business. All these challenges should be met with a previously established action plan and a healthy budget.   

  1. Obtaining agreements, licenses, registrations, or patents 

Another important challenge facing many startups is establishing and securing a license agreement with a large manufacturer or distributor who wishes to market certain products or services. The same challenges exist when registering a patent, a website, identifying and establishing a manufacturing relationship, or protecting property rights and inventory. To overcome this hurdle, cultivating healthy relationships is crucial. While establishing positive retail alliances, license agreements, or permits can be challenging, it is of the utmost importance, particularly in the corporate world.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers