But, just as with those often quoted comments based around bringing solutions rather than problems, then so too is it important to consider how you will meet any challenges. The first steps to meeting challenges are, of course, identifying them accurately and in enough time, to either avoid them altogether or to be fully prepared with an action plan when they are encountered.
According to the UK government and Companies House statistics there are five main reasons why startups and early-stage businesses usually fail. Listed in order of failure rates these are:
It would seem then that these are the most common challenges that those starting a business will face but as can be seen, none of these should be unexpected and that makes them so much easier to avoid or to prepare for in some other way. But remember that it is not only a startup business that faces these challenges, as all of the five points will be recurring themes throughout the life of your business.
To mitigate them, do not only investigate the market as you start but continue to do so all the time that you are trading, and this is equally true for continuing to fully understand your existing and any potential customers. Also, the business plan should not just be prepared and then left on the shelf to gather dust but should be constantly updated to reflect new circumstances as this will ensure that you are operating to the current environment and not a more dated one.
Funding for any business comes in different forms and whilst more funding is required for those looking to scale, having sufficient funding, from whatever source, is the lifeblood of any venture. Raising new equity will normally take at least six months and ensuring that your business has a sufficient runway and contingency fund to survive the inevitable setbacks will prove to be invaluable, not only for its growth but for its very survival.
Continuing to constantly investigate your market, update you plan and strategy, and ensuring that the cash is flowing will only get you so far as it is necessary to have a good brand and product, and to make sure that it has high visibility. Use all this data and experience gained to predict the challenges, adapt in need, and stay ahead of the curve and your competition.
But one of the most effective ways of meeting the many challenges is by seeking help as and when it is required. This can be from anything from joining an incubator or accelerator to more bespoke solutions, but identifying and working with the best advisors will pay most dividends to your business. These may be advisors for specific tasks such as accountants or lawyers, or closer and longer term advisors such as establishing a good Advisory Board.
Bringing in the wider and more experienced skillset will enable you as a founder to strengthen any areas of weakness that exist within the core team as well as freeing up time to focus on the scaling the business. This broader knowledge base will, in turn, identify more potential challenges more easily, and collectively to devise much broader and more comprehensive solutions to those challenges.
As such, as a founder, your aim should be to ensure that there are no problems, only challenges, and even before these challenges are met you already have solutions in place for them.
5th October 2021
in British English