6 Major Challenges Startup Founders Face After Launch
Startups can easily be launched these days. Launching is no longer a big deal. What matters most is the sustainability of the business after launching it. The reason for this is that there are major challenges startup founders face after launch.
With the availability of many factors such as the venue for the launch which could be your home, garage, backyard or an office, the ease of assessing funds through venture capitalists and angel investors, crowdfunding platforms and other sources and availability of startup incubators and accelerators, launching your business is pretty easy.
The reality of the matter is that there are major challenges startup founders face after launch that have necessitated the failure of many startups despite being launched by professionals.
The stat is damning. Between 60-90 percent startups stumble and fail within the first five years of launch. The sources have varying data on this but they are all in agreement on the range.
The inception of technology has reduced the traditional startup business problems but it has also increased the challenges entrepreneurs face when starting a business.
The above assertion may sound contradictory but indeed, it is not. Some of the challenges facing a startup business or challenges faced by startup companies are outdated now while some were not there in the past.
In this article, we shall take a look at the major challenges startup founders face after launch. Some of the problems may be same as problems faced when starting a business and leadership challenges in a startup.
The Major Challenges Startup Founders Face After Launch
This has been a recurring problem. You really cannot run away from it. You have to manage your cash flow very well to be able to survive the cash issue. It is indeed one of the major challenges startup founders face after launch.
Once you have launched your company, you will need a lot of money for running the business, maintaining overhead cost, running advertisement, and other issues that will require funds.
After the initial capital or seed money gotten from venture capitalists and angel investors, you will find it difficult to get them to commit more money unless there is a significant improvement on the potentials of the company.
This could become a major problem and could lead to business failure if you mismanage your initial capital.
Copying existing businesses
Copycats encounter problems immediately after launch. By copying the business and product models of existing and established business brands, you are only going to find yourself competing at a very high level.
Most times, to attract more customers, these startups reduce price and this will invariably lead to making little profits, compromise the brand image and make it appear inferior. You should avoid this if you can.
Hiring employees is one of the major challenges startup founders face after launch. There are two outcomes that prove very problematic; overstaffing and understaffing.
Hiring too much staff will eat into the funds mapped out for sustaining the business while it will be disastrous to start with too few staff as that will lead to under production and breaking down of the staff from too much stress.
Be sure to get the number needed to run your business; no more, no less.
Insufficient advertising and marketing
I have always stated in most of my articles that marketing is the key to maintaining and sustaining a business. As a startup, you need marketing more than established businesses.
The inability to explore all the available platforms for advertising and marketing; online platforms, social media platforms, print media, electronic media, mouth to mouth marketing etc, has led to the failure of many startups.
To survive this problem, startup founders have to map out adequate funds to help out with marketing and advertising.
Companies innovate to stay relevant. Startups must do same. Innovation deficiencies have become one of the major challenges startup founders face after launch.
It is very important to innovate so as to counter enhancements made to product and service offerings by rival brands. To stay relevant, you must innovate and this means that you have to have a team charged with innovation in the company.
Failure to set up hedge or corpus fund
A hedge or corpus fund is gotten from setting aside a small portion of profits periodically. The inability of startup founders to set up this fund for any reason whatsoever could spell disaster and doom for the company.
The hedge fund could become the lifeline of the company in adverse situations. It is therefore imperative to set it up to help with certain things such as the expansion of brand and venturing into new markets.