It’s a sad but true fact that there are startup problems that money can’t fix.
In fact, according to Forbes, nine out of ten startups will fail. It’s a good idea to know this fact going on – this way you can eliminate any naiveté you may have in regards to your probability of success.
That being said, you can have a successful startup!
We just want you to be aware that there are some problems that can’t be fixed with added cash flow, while there are some startup problems you can avoid for the best chance at success.
Oftentimes, entrepreneurs think all their problems can be solved by money. Unfortunately, this isn’t true.
But, there are things you can do increase the odds that your startup will succeed. To help you in your efforts at success, we look at startup problems that money can’t fix. Avoid these issues, and your chances at success are greatly improved.
Money Can’t Fix a Bad Product
The number one reason startups fail is that they go to market with a product no one wants. This is one of those issues money can’t fix.
For your startup to succeed, it’s important to create a product or service that your target audience actually wants and needs.
It’s fairly common for a startup to bring a product to market, but have to make a few revisions to get the perfect fit. In the worst case scenario, the startup runs out of money before the product is made right.
In the best case scenario, you would have conducted surveys and met with consumer product groups to test your product before launching. Do your legwork and conduct product testing before you launch.
Money Can’t Fix a Bad Management Team
Another problem you can’t fix with money is hiring a weak management team. What are the characteristics of a bad management team?
- The don’t work well together.
- They failed to conduct research to get the right product to the right people at the right time.
- Their marketing strategies are ill-conceived.
- They don’t execute well, and they don’t manage people to the best of their abilities.
- They are not equipped to hire an A-team. This creates a weak company overall.
Your goal should be to hire the smartest, most effective people you can. You want a talented workforce that is both responsible and passionate about your startup. They must provide your strong foundation.
Money Can’t Fix Partner Incompatibility
Imagine this: once upon a time a startup had two partners who shared the same dreams. These two people could handle minor disagreements with ease.
Yet, as the startup grows, problems escalate. The partners don’t agree about expansion and growth strategies. They may even begin to argue about the products and the staff.
It’s no longer easy for them to work through arguments in a productive manner.
One suggestion for solving this issue is making sure that each partner is carrying a similar workload. Meet regularly to make sure you are both on the same page. Consider making adjustments as necessary.
We’ve covered some of the startup problems that money can’t fix. Now you have a few tools to arm yourself with so you can avoid these situations.
It’s worth noting that running out of cash does not cause a startup to fail. Running out of cash is simply a symptom of other bigger issues.
For example, you might run out of cash because you’ve spent wildly trying to convince people to want your product. Or, perhaps you’ve overlooked one of the aforementioned problems and tried to fix it with money.
Your best chance at success is to avoid the pitfalls of common startup problems. Arm yourself with knowledge, a plan, and a strategy. Research your market, meet your customers' needs at the right time, and watch your startup succeed.
Are you a new startup? Are you looking to get your new business off the ground and watch it rise to success? We are here for you. We can help answer your questions and guide you through the process. Outsource your finances, payroll, HR duties and more to us. Contact Escalon today to get started.
Image: Tim Gouw