Business Startup Challenges and How to Solve Them

Having an idea for a new business is an exciting time. This is often the moment that entrepreneurs and business owners are at their most passionate as they strive to make their dreams and vision a reality. Once you get into the nitty gritty of actually running a new business, though, you are faced by many challenges. What are some of the most common, and how do you avoid them?

Small Business productivity

Money Matters

Money issues are the obvious challenge that new businesses face. This takes many forms, including where the initial sources of funding come from. After that other issues relating to money start to take priority. This includes you as the founder having enough personal income in order to maintain your lifestyle, but there are also factors that relate to the business. The most important of these is cash flow. Many good businesses have failed because of problems with cash flow, so make sure you manage your cash closely and carefully.


Time is another thing that you will have to manage carefully, as you will never have enough. Most people who start a new business find they work 12 or 15 hours a day for months or years and still feel like they never get everything done. This can lead to fatigue which often results in bad business decisions.

Recognising this is an important first step but then you have to put in place measures that will free up your time. These solutions could be procedural, staffing, technological, or a combination of the three.

Client Dependence

Many small businesses that are just starting up derive a large amount of their income from a single client. There are benefits to this, particularly if the work is regular and the client pays well, but it is also a situation that has considerable risks. If that client reduces or stops doing business with you, it will be very difficult to make up the shortfall in income.

The answer is to have a more diversified client base. This brings challenges of its own, including the fact that you will need to allocate more resources to administration. A larger client base is more stable for your business, though.

Founder Dependence

What would happen to your business if something happened to you in the morning? Many new companies are so dependent on the founder that they would not last very long if he or she was not involved. Sometimes this founder dependence lasts for years after the company starts trading.

If your business suffers from founder dependence, you are the key to the answer – you have to delegate responsibilities to give members of your team more control.

The Quality Versus Growth Conundrum

This final point is connected to the points about client dependence and founder dependence. One of the reasons that businesses stay client or founder dependent is because of a misplaced sense of quality. This is when the founder of the business feels it is essential that he or she personally manages every client relationship as that is the only way to achieve the level of quality that they desire.

Not only is this a barrier to business growth, but it also presents risks to your business that could be terminal. The solution is to instill your standards of quality in your team, and then let them manage the client relationships. They won’t do everything exactly the same way that you would, but that does not have to mean quality of an unacceptable standard. When you do this you give your business room to grow.

None of these challenges are easy to overcome, but most successful businesses have to confront all or some of them at some stage of their early development.

Posted in Small Business.