Problems faced by Startup Businesses
Everyone has the dream of starting up their own business and being their own boss, and for most people it always stays a dream due to the many obstacles faced in starting a business and more so keeping it running and profitable.
Some key hurdles that all entrepreneurs and business owners face when starting a business are:
Competition
New businesses are often the little kid in a very, very large, bully-filled playground. Rival companies that are already trading in similar markets to yours, already have the upper hand and advantage. They have been operating for a longer time, have gained more knowledge in operating that sort of business, know the market better and can probably adapt to the market changes quicker.
Lack of Funding
99% of people thinking of starting a business wont because of the realisation of the costs and the lack funding available. Its funny that we start businesses with the aim of making loads of money, but in fact you cant make money unless you have money to fund the business from the beginning. Financial risk plays a huge part in small businesses, ensuring and maintaining a healthy cash flow is essential. Start-ups need substantial amounts of money to cover costs. When your starting from scratch there’s many things that need to be developed, for example, logos, website, accountants, marketing materials, staffing, launch programme, merchandise, the list goes on and the bill goes up and up!!
Time Restraints
Starting a business is not a part time Saturday job, business owners need to be able to commit to extremely long hours in the start-up phase. There is everything from staff contracts and health and safety policies to marketing materials and websites to develop and the longer this takes the longer the business takes to be established and the higher the financial risk becomes. The owner will become responsible for everything from the grunt work to the office managerial responsibilities.
Poor Planning
Many business fail in the first year due to poor planning and preparation before declaring themselves as “OPEN FOR BUSINESS!” Before launching any business everything from suppliers to rates should be investigated. Noticing a hike in unexpected costs after you have just launched a business can bankrupt the plans in no time. Extra time should be taken ensuring that everything is covered, the best way to do this is by creating a comprehensive business plan.
No Historical Data
New start-ups often face the problem of just not knowing what is going to happen or what should happen. Launching a new business concept to the market or even for the business owner themselves with little knowledge of the industry can be extremely hard to plan for, as there are no expectations.
However that doesn’t mean its the end of the road and the dream…
The franchise market is growing rapidly at the moment with an estimated turnover of over £12 billion last year, up another £2 billion on previous years. This market is thriving at the moment due to the unsteady market conditions (with the financial collapse only a while ago and the unrest in the international markets especially across Europe) and the reassurance of buying into a proven profitable business model.
Franchises are proving ever more popular due to the weight it lifts off all the problems that start up firms will face. We say the main problems being:
Competition
Well your a part of the big family in a franchise. The rights to a franchise allow you to trade under their Brand name, following the brands ethics, guidelines and most importantly share the knowledge that the brand has developed over the past years establishing themselves. With full backing of a recognised brand businesses have a far higher success rate in establishing themselves within the market.
Lack of funding
This is always going to be a problem faced when starting up a business; however with the franchised model most franchisors have already carried out lengthy meetings with the high street banks. Banks are far more reluctant to fund proven business models such a franchise rather than a completely new concept with no proof of its potential success. The costs involved in starting up a franchise are also significantly cheaper then staring up a new business, there are no websites to develop, no contracts to get solicitors to review, the business model is already developed, in operation and making money!
Time Restraints
This one is a simple one…. the franchisor has already developed all of these systems, documents and resources that are needed within any business. When people buy into a franchise they are simply being bolted onto and integrated into a working business concept ready for operation in a very short period of time.
Poor Planning
For franchisors this is a constant process of continually devising business plans and development plans for their brands, and therefore it comes as second nature. Franchisors work very closely developing individual business plans with new franchises ensuring their business aims work well within the franchised model they have invested into. A easy way to think of it is…. they’ve done it before, they’ll do it again!
Source:http://apex360.co.uk/problems-faced-by-startup-businesses-and-a-solution-2/
