By Candice Georgiadis, social media influencer and founder of Digital Day Inc, a social media and marketing agency in California.
All startups face challenges when first setting out. Whether it is funding, hiring the right employees or marketing their product, every startup will experience obstacles. However, the most successful startups are those that can identify the challenges they are facing and put a plan in place to overcome them.
The following is a list of the top challenges faced by startups and some advice on how to overcome them.
1. Access To Finance
One of the biggest challenges startups face is access to finance. Getting a bank loan can be difficult, especially for early-stage startups with no track record or collateral. And even if a startup can get a loan, the interest rates can be prohibitively high. This is where governments can help by providing risk capital through venture capital funds or loans at preferential interest rates.
Overcoming This Challenge
1. Angel Investors
One way to raise funds for your startup is through angel investors. Angel investors are individuals who invest their own money into startup companies in exchange for equity.
Another way is through venture capitalists. Venture capitalists are firms that invest money into startups in exchange for equity and a share of the profits.
You can also raise funds for your startup through crowdfunding. With crowdfunding, startups solicit small investments from many people, typically through an online platform. In exchange for their investment, backers typically receive rewards such as products or experiences related to the startup company.
2. Lack Of Talent
Another challenge startups face is the lack of talent. With limited resources, it can be difficult for startups to attract and retain top talent. This is where government programs that provide training and mentorship can be helpful. By investing in the talent of tomorrow, governments can help ensure that startups have the skilled employees they need to succeed.
Overcoming This Challenge
One way to attract top talent is by offering stock options. Stock options allow employees to purchase company shares at a set price in the future. This gives employees an incentive to help grow the company so that they can profit from their investment.
You can also offer flexible work hours and remote work options. This can be especially attractive to Millennials who value work-life balance and flexibility in their careers.
3. Red Tape
Government regulations and bureaucracy can be a minefield for young companies trying to get off the ground. This is why many governments have programs in place that help startups navigate the regulatory landscape. For example, Startup Canada offers free advice and support to Canadian entrepreneurs through its network of mentors and experts.
1. Stay Informed
Make sure you are up-to-date on all the latest government regulations and policies. You can do this by subscribing to relevant newsletters, attending industry conferences or reading online resources.
2. Get Help
If you are struggling to understand or comply with government regulations, don’t be afraid to ask for help. There are many organizations out there that offer free advice and support to startups. You can also consult with your lawyer or accountant for guidance on how best to comply with the law.
3. Keep Track Of Progress
Document everything you do in relation to your business—from the amount of funding you raise to the number of employees you hire. This can help ensure that you meet all the requirements set out by the government.
Overall, startups face many challenges. From raising capital to complying with government regulations, it can be difficult for startups to survive and thrive in a competitive market. However, by taking advantage of resources such as angel investors, crowdfunding platforms and government programs, startups can increase their chances of success.