The startup world is all about the survival of the fittest. That’s why more than 80% of new companies fail in the first ten years of their existence. The first business development phases are usually the toughest. That’s when entrepreneurs need to make their offer stand out, maintain a solid cash flow and reinvest money in developing their business operation.
During this time, companies are facing many challenges. This article will single out the hardest challenges on the tech market and explain how entrepreneurs can overcome them and improve their business.
Making a business stand out
Making a company stand out is one of the hardest challenges in the Startup Era because new technologies have allowed people to start their businesses with minimal requirements. The competition is the fiercest in the tech niche. That’s why entrepreneurs should start analyzing competition from the day one. Each business plan needs to contain a thorough competitive analysis and every product and service need to have a ‘purple cow’ that will make it unique.
Choosing the right partners
A good partnership is a basis for business success. By establishing strong ties with companies that are doing business in the same ecosystem, entrepreneurs can expand their market and make their offer more competitive. Partnerships can also be very volatile, especially in the tech environment. Untrustworthy partners can steal company’s patents, or drive away its customers. That’s why entrepreneurs need to carefully choose companies and individuals they want to do business with.
Running company’s finances
Most tech entrepreneurs don’t have any education in finances or business administration field. That’s why they’re usually outsourcing their whole financial department. This is a smart practice, but in the first phases of business development, some companies don’t have enough funds to pay for services of the bookkeeping and accounting agencies. Tech companies usually start receiving revenue, after their product gets tested and released. Before that, their funding usually depends on investors and business loans. Some entrepreneurs try to run their company’s finances by themselves, but this is usually a bad idea because mistakes in this department can result in high fines, which can drive companies to liquidation.
The story of every successful business starts with an idea, but an idea itself in not sufficient for business success. Most business plans in the IT niche require large funding in order to be implemented in the right way. That is why one of the most important tasks for every new entrepreneur is to find investors, who will recognize the potential of their business idea and invest money in its development. Finding investors is a tough challenge. Entrepreneurs need to learn how to present their business and attract investors’ attention. They need to create an appealing sales pitch and implement it into their live presentations and business plan.
Winning the consumer trust
Consumers would rather buy products and services from well-known vendors. That is why it’s very hard for new companies to win consumers trust. In the beginning, companies need to offer their products at much lower prices than their direct competitors. Crafting a brand from scratch is not easy, but it also comes with a few advantages. Entrepreneurs can do lots of experiments and A/B testing with their branding campaign. That will help them to target their perfect buyers and create a large following.
Even the biggest corporate entities had their portion of seemingly unsolvable problems. These, as well as all other challenges and risks, are an integral part of business development, and every entrepreneur needs to face them. After some time they’ll gain more experience and learn how to deal with the toughest problems in a calm and prudent manner.