Problem of Venture set-up and prospects

09/10/2020 1 By indiafreenotes

Lack of Finances

Cash flow is essential for startups to survive. One of the key challenges that small businesses face today relates to finances. As income increases, the expenditures also increase and to top it all, startups rely heavily on investors who provide them strong financial support. When such situations arrive, startups are the first ones who lose on properly managing their finances, and eventually succumb to the pressure. While entrepreneurs have to make sure that they have enough funds to go around, in the meantime, they also have to pay their employees, contractors, mortgage, and grocery bills.

Poor Business Planning

Proper planning is the key for startups to get their businesses off the ground. In this technological landscape, writing a formal business plan based on a vague requirement of some institution is suicidal. Due to poor planning, many businesses fail in the very first year because they do not effectively factor in challenges and pitfalls. Even if the startups have innovative ideas and ambitions, but their business plans lack perspective, they are doomed to fail or they have to continuously devise and change them.

Lack of Proper Marketing Strategy

It is always a challenge for startups to figure out best ways to market their products or services. The fact that small businesses need to maximize their return on investment with efficient and result oriented targeted marketing also makes them vulnerable in terms of trust they have develop vis-à-vis customers. Without putting a comprehensive marketing strategy in place, companies’ profits take a steep plunge.

Lack of A Dedicated Team

Due to the lack of a proper team, any business will suffer immensely. Lack of commitment aggravates frustration in the organization which quickly escalates into an open conflict. If the team members start making under commitments due to the fear of being responsible or blamed for failure, businesses will never achieve their goals.

Fierce Competition

Competition is the most inevitable challenge that startups face. In fact, startups have to bear the brunt of facing two-way challenge: one coming from monopolistic businesses that have dominated the market and making difficult for newcomers to emerge. Second, there are countless startups that are launched regularly in the market having innovative ideas, so it is highly likely to get swallowed by the shadow of other startups.