3 Common Hurdles Every Business Faces and How to Avoid Them
Over the past few years i’ve been through the trials and tribulations that any entrepreneur experiences during their journey. Unfortunately many of these obstacles lead to the eventual closure of the business. That said, I definitely had some key takeaways from these experiences and was able to identify a few patterns between them. There are certain hurdles that nearly every startup will go through, depending on how they are handled can determine the success of the company.
Here are three common hurdles that every startup will face and how you can avoid them:
Being Able to Build the Right Team
Like any team, chemistry will always outweigh individual ability. It is very common for business owners to go straight for the individuals with decorated resumes and pristine track-records. While talent always looks good on paper, they may not be the best fit for your organization. If they aren’t a good team player it will severely effect productivity. Especially in smaller organizations it’s imperative that you identify and build a core group that can establish a strong culture for future hires.
Once you initially screen your candidates it’s always a good idea to throw them into the mix so you can observe how the interact with the current group. The individuals who seamlessly assimilate are definitely the ones worth keeping.
In one organization that I was a part of, the hiring process required interviews with each member of the core team. The interviews were conducted separately and were a great way to get a feel for the candidate without putting too much pressure on them. The team and I would immediately be able to tell which ones we wanted to work with as well as those who wanted to work with us. Every company will have a different recruitment process, just remember that you need to focus on the right talent over what looks best on paper.
Raising Capital Before You’re Ready
Most startups believe they need to raise funding in the early stages in order to have a fighting chance. While having capital makes things seem easier (which they are) it often leads to poor decisions. When you’re broke it makes you think outside of the box and forces you to come up with creative ways to get by on scraps. If you secure a couple million dollars from a venture capital firm, it’s common for businesses to lose that resourcefulness.
Additionally, once your company takes in funding you’re not only giving up some of your ownership but you’re also putting an immense amount of pressure on the company to perform. With investors now breathing down your neck you have very little room for error.
The best way to avoid this hurdle is to bootstrap as long as you can. Talk with the other members of your core team and leverage your connections to help push things along. As you go through a couple phases of trial and error, the core competencies of your business will begin to show. Once you come out of this trial phase it’ll probably be time to raise some capital.
Cash flow will make or break any business. Every business owner needs to stay on top of their invoicing so you can keep cash flow consistent and dependable.
One of the best ways to properly manage your finances is to use an online invoicing platform that allows you to manage all of your finances in the cloud. Most of the top payments companies and online payments solutions will provide various payments products for your accounting needs. Make sure you choose the right company since some solutions may be more optimized for your industry than others.
There will always be ups and downs when trying to pioneer your startup. Whether you’re successful or not will be dependent on how you’re able to cope with the downs and evaluate the ups. Take careful note of these three hurdles and do your best to avoid them.