The path of the entrepreneur is never easy; in fact, it is most certainly one of the most challenging vocations a person could take. Being employed is by far, the easier way to go. It is a known fact that a majority of venture capital-backed startups fail to meet their projected goals or ROIs.
VC-backed endeavors are by no means blind gambles, and the venture capitalists themselves didn’t get to be flush with funds by throwing good money after bad, either. This tells you that even the most well-thought out and researched startups are still easy prey to the whims of the marketplace.
The following are some of the most formidable obstacles to a startup’s success, and along with them, some ways of effectively mitigating or even eliminating these hindrances totally:
Insufficient Resources
While some ventures are fortunate enough to get sufficient funding for their planned projects (including expansion), it rarely is the case with many other entrepreneurial endeavors. Many ambitious and elaborate strategies are curtailed by the reality of insufficient funding, and what could have been a great idea would just become another note in the back burner, waiting for the availability of resources to implement it.
If all the math has been done and the plan has yielded a theoretical bottom line that meets the expectations of the stakeholders, then this worthwhile project should be given the lifeblood it needs to start.
The stories of companies borne out of numerous little loans from friends and relatives (and the occasional angel investor, if one is lucky) are real, and many a small and promising company has had its beginnings in such humble circumstances. Services like Dealstruck have also emerged to offer small companies the money they sorely need, especially when the banks won’t give them the time of day.
Inhospitable Economic Climate
While one could have a great idea to start a company with, the economic situation could prove to be difficult and make execution difficult or even impossible. Massive economic upheavals in recent history like the dotcom and housing bubbles created an environment in which businesses could not get the money it needs to start or expand, or render the market unwelcoming to their products and services, especially if they do not meet the more basic needs.
In cases like this, patience and/or adaptability will come into play. One choice could be to just wait it out and make the startup happen during a better time in the future, but there is no guarantee that the opportunity will be available again. The very same ideas can take root in two different people, and someone else might beat you to the punch. A change of plans could also be done in order to make starting up require considerably less capital (not an easy task in the least), or tailor-fit the product or service to the current economic situation.
Monolithic Competition
In most cases, there will be pre-existing companies who are already well-entrenched and established in name and reputation. There’s no going around the reality that there are bigger, better-funded outfits who are not going to wear kid gloves around the competition.
Like the biblical David, smaller companies have the advantage of being more flexible than the gigantic Goliath. They can easily change direction, and take their pick of targets to focus on instead of encompassing the entire market as bigger companies do. Pick your battles, stay adaptable, and do not lose sight of the company’s goals, and the little startup might just grow into something that can take the old titans on (think Google).
Onward, brave and ambitious entrepreneurs!
About the Author
Stacey Thompson is a professional writer, marketer, entrepreneur, and a lover of weird little animals. She is based in San Diego, California, and shares a blog with her closest friends, Word Baristas.
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