Dot.com Era spawned a new term that totally changed business world, startup. There are many different definitions for the word startup and US Small Business administration states that startups are technology oriented businesses, with high growth potential, while computer scientist and venture capitalist Paul Graham, thinks that incorporation date or orientation towards new technologies are not things that define certain business as startup. He thinks that growth is the sole parameter that defines all startup businesses and entrepreneurs who run them should be committed to finding unique business models that are able to generate fast growth.
From all this we can realize the importance of growth for startup businesses. Unfortunately when running a business, entrepreneurs often face different issues that can stop or delay their company’s growth. In this article we reviewed some of most common issues of this kind, and tried to offer the best possible solution for each of those.
Inability to collect enough funding
Although most people connect startup businesses with great ideas and agile entrepreneurs, in many cases their growth directly depends on the size of investments entrepreneurs are able to attract. Inability to collect enough funding, in most cases won’t lead your company directly to bankruptcy, but it will definitely make it less competitive.
Attracting investors need to be done with sharp business plan and interesting presentations. Business plan writing and ability to present your idea in front of large crowds are some of the most important business skills that every entrepreneur needs to posses.
Many entrepreneurs are not naturally born managers. Even if they are, most businesses require one managerial position on every 5 or 6 regular employees. Small businesses often have problems with finding skillful and experienced managers. ‘A’ Players usually work for big corporations; ‘B’ players are trying to find a job in some of these big enterprises, which leaves small businesses with ‘C’ class of managerial staff.
Solution for this issue mainly depends on the type of business. It’s always good to support best low level employees to attend on- and offline management courses. Hiring trainees and interns can also be a solution for this problem. Although they don’t have experience in real company environment, interns usually invest much more effort into their every-day duties, and learn fast.
Lots of bad debt
Debt collecting is one of the tasks entrepreneurs hate the most. When you are doing business, there’s a possibility that you will stumble upon customers and entrepreneurs who don’t pay back their debts. It is usually hard to spot these individuals, so one day or another you will need to deal with this problem.
Secret of debt collection success lies in stubbornness, but in certain cases some flexibility can also come handy. You should first discontinue all services your company is delivering to the debtor, and start sending notices and reminders at least once a week. If after some time you realize that they won’t pay back their debt, you should hire debt recovery agency, because it is much less painful than chasing court settlement.
Companies with production- or retail-based business models, often have problems with growing inventories they are not able to sell out. These surplus products tie funds, which company invested in their production and require even more funds for renting and equipping storage facilities.
For selling out their inventories, companies need to organize sales and introduce discounts on surplus goods. Customers love these, and they also love buying products in bundle packages, so surplus products can also be packed with new products and sold in a bundle, for lower price.
Employees taking a leave or quitting
Small businesses have a lot of human resource problems in the beginning. Every employee’s sick leave can jeopardize company’s regular work, especially in enterprises that only employ several workers.
Solution for this problem can be found online. There are dozens of freelance market places, where you can hire freelancers for almost all kinds of digital work. Another solution that’s even ore effective (on the long run) is to outsource certain parts of your company’s business.
Entrepreneurs need to secure their company’s growth and deal with all problems the moment they show up. This way the company will have constant money flow, which will fuel its further business growth and development.