Start-ups face a million challenges if not more. These start-up challenges are so many and fierce that many start-ups fail before they turn one year.

Only tough founders can circumvent this challenging environment and scale their businesses from the start-up stage.

Having said that, it is important to point out that these challenges are not supposed to be an excuse for you not to start a business. They are not excuses for you to quit working on your business.

As the challenges get intense, you need to get tougher. You will need to get more skills and develop a thick skin to absorb them and avoid getting emotionally and physically drained.

Intense challenges in the marketplace will always favor the strong. This is because start-up challenges eliminate weak competitors and increase your chances of success.

In every crisis, some businesses grow immensely as others go out of business. It is therefore a matter of positioning. You just need to be the right person to navigate the challenging start-ups' ecosystem.

Here are 6 challenges that affect start-ups and how to overcome them.

1. Limited skills among founders

This is the greatest cause of failure for start-ups. Many people come to the start-ups' world with little or no business skills.

This is a guy who is a professional computer scientist, he has never read any business book or took any business course. When he starts his tech company and develops amazing tech solutions, he is now stuck.

He does not know how to get them into the market. He lacks management skills, people’s skills, sales and marketing skills, negotiation skills, etc.

This guy now has an amazing product that no one knows about. His business is killed by dead inventory. Because of this, he chooses to quit and get formal employment.

In the above scenario, it is not that the business was not scalable; it is just that the founders did not know how to scale it. Many founders find themselves in such a situation. They cannot rise above their area of expertise and acquire knowledge and skills in other business areas.

A start-up founder must have basic skills and knowledge in all areas. They need to know a bit about everything. Since they cannot afford to hire experts, they need to be experts.

Solution

The solution to this is to keep learning. Keep analyzing your performance and identify your failure factors. Keep reading books and articles. Attend seminars and take online courses. If need be, you can enroll for an MBA. If you combine your technical skills with some business skills, you will scale your business beyond your wildest dreams.

2. Low sales

Among other start-up challenges, this one is the most common. It affects more than 95% of start-ups. Founders cannot figure a way of having people buy their products.

If you look at many business plans, you will see heavenly sales and revenue forecasts that never come to pass. They remain dreams. Many business plans will say that the business will make money from the first week.

After 6 months, the business has not made any sales. The founders are discouraged and they are almost running out of cash. If they fail to figure out a way of overcoming this challenge, they go out of business in no time.

Solution

The solution to low sales is high sales. It is just how it is. High sales are a product of effective marketing and efficient sales processes. You need to market something to sell it.

This is the single worst mistake I made when I started my business; I never allocated money to marketing. This is why I ran out of business due to low sales.

Today I allocate around 20% of all my profits to marketing. These marketing campaigns always bring in more money than I invested.

The sales process needs to be seamless. The product needs to be accessible to customers. This is achieved by having the right distribution channels.

A good sales team can go a long way in increasing your sales. This will cost you nothing because you will be paying them on commission. We will handle more of this in subsequent articles.

3. Poor financing

Poor financing is also a key challenge to start-ups. Growth will always cost money. Because of low sales, start-ups do not have enough finances to fund growth.

It is also very hard to secure funding from venture capitalists and angel investors. Moreover, banks will never give start-ups loans. This is why many start-ups are starving financially.

Solution

The solution is to have more sales revenue to finance your business. It is impossible to change the fact that banks and investors do not want to fund your business. This calls for internal funding.

Reduce your business expenses and generate more sales. This will increase your profit and you will have more money to fund growth.

4. Competition from established brands

Established brands will always be a threat to start-ups. They have the resources, the systems, the reputation, the connections, and everything else they need to grow.

Start-ups, on the other hand, have none of these. They end up suffocating from low market share and major price wars.

Solution

The solution is to identify a niche that is underserved by these giant companies and focus on it. A small niche will cost you less money to grow your market share and dominate.

Do not try to serve the whole world in your first year. Try to get a foothold in your neighborhood first. You can then grow from there.

Revenues from one market niche will finance growth in the next one. This is a gradual growth that works best with start-ups.

5. Poor social connectivity

The success of your start-up is highly dependent on the people you know. People are your greatest resources. One person in your network can open doors for your business that will catapult you to growth.

Solution

Very few people are born connected, the rest of us have to develop connections over time. The secret is to be social and seek connections actively. Attend gatherings that have the kind of people that you need in your network.

Always promote yourself when you get the chance. Learn how to talk about your achievements without seeming like you are bragging.

Get people’s contacts; offer to take them for lunch or dinner. Offer to give them a service for free. In this way, you will win their hearts and they will be prompted to reciprocate goodness. This is how to get connected.

6. Poor government regulations

Many governments all over the world are trying to make SMEs their focus. They have realized that the growth of small businesses can solve every problem their economies are facing.

However, you will still find retrogressive policies that hinder growth among start-ups. Some of these are poor tax policies and a lack of government incentives and subsidies.

Solution

The solution is to form start-ups associations and unions that increase your bargaining power with the government.

The only way you can have any government listen to you is to get numbers and be united. This is because governments only listen to groups and not individuals.

Conclusion

Despite the many challenges that start-ups face, it is possible to overcome them. Though many businesses fail, there is a good number that succeeds and becomes a pillar of change in society.

They also make their founders extremely successful. As I always say, you cannot afford not to start a business.

This is because businesses are the systems that act as bridges to the much success that we need. These 6 steps will go a long way in helping you become a better businessperson.