10 Common Obstacles for Startups (And How to Overcome Them)

From securing funding to handling growth, starting a new business comes with many hurdles to overcome. Failure to understand these challenges can cause a business to falter before it really gets off the ground. However, with the right preparation, entrepreneurs can overcome (and sometimes even mitigate) obstacles and continue on the path to success.

To help new and aspiring business owners who want to start, Council of Young Entrepreneurs Members share 10 common obstacles startups face — and how to overcome them more effectively.

1. Stand out from the competition

A challenge that many startups face is to gain a unique position in the market and stand out from the competition. Most markets, especially in technology, are highly competitive. No matter how good or creative your product or service may be, there is the initial hurdle of convincing customers to choose you over more established competitors. In many cases, your competitors will be better funded and have a head start simply because they are more familiar. You need a marketing strategy that really drives your unique value proposition. Advertising alone is usually not enough to get people to try something new. That’s why it’s important to have social proof, such as reviews from people who have tried a sample or beta version of your product. – Kalin Kassabov, ProTexting

2. Create a Cash Flow Channel

Creating a pipeline that maintains cash flow is one of the biggest challenges any startup will face. Often, new businesses focus on making a single sale at a time or acquiring one customer at a time. However, it is much more efficient and time-saving to create a funnel that automatically generates leads and sales over time. This includes creating free downloads, high-quality content or a value proposition. Then lead customers to take an action, such as signing up for your email list, purchasing your product, and investing in higher tier products and services. I recommend starting one step at a time and focusing on producing value. It can take time and effort to build a funnel, but once you do, the results are powerful as you’ll be generating income automatically for years. – Syed Balkhi, WPBeginner

3. Maintaining the customer experience at scale

One roadblock I see repeatedly is a slippage in customer experience as the business scales. Often, this is because the founder no longer directly handles customer relationships or oversees multiple areas, both customer and non-customer, at the same time. Customer experience is the most valuable differentiator at a startup’s disposal, so it’s imperative that founders don’t fall prey to this common pitfall. To overcome this challenge, startup executives must do three things: 1. Design a customer journey with intent and purpose. 2. Record and systematize clearly the key moments of the trip. 3. Share the systems and the intent behind them with every employee to ensure consistency and alignment across the organization. – Brittany Hodak, Creating Superfans

4. Keeping Up With The Books

One hurdle that a surprisingly large number of startups struggle with is day-to-day bookkeeping. In fact, throughout my career, I have discovered many companies that have gone years without implementing basic recordkeeping practices. While this will not cause problems for companies in the early stages, the impact of poor accounting or bookkeeping is cumulative. It can lead to various challenges such as failure to secure external financing, poor cash flow management and inaccurate tax returns. I recommend that all companies, even startups, prioritize bookkeeping from day one so that a solid financial infrastructure is in place and positioned to scale. – Jack Perkins, CFO Hub

5. Finding the right marketing mix

A big hurdle most startups face is finding the right marketing mix that fits their marketing budget. Modest budgets and limited resources are the common reality for most startups, so digital marketing is often the most appropriate approach. But what works best among the different ways such as social media, paid search advertising, email marketing, content marketing and display advertising? There is no magic formula that works for everyone. However, you can overcome this by understanding who your target customer is, their browsing habits and the type of platforms they are on, and by leveraging content around thoughtful solutions that solve their problems. Calculate cost per lead and implement an SEO strategy that focuses on improving online visibility. – Brian David Crane, Spread great ideas

6. Ensuring Adequate Funding

A common hurdle that startups struggle with is securing sufficient funds and managing their funds effectively. However, it is extremely important to cover initial costs, scale the business and survive the often difficult initial stages. But there are ways around this. One way is to start with a well-researched business plan that outlines your goals, target market, revenue model, and expenses. Investors and lenders often require a detailed plan to consider funding requests, so having a detailed plan ready can help you secure the funds you need. – Andrew Munro, AffiliateWP

7. Balancing staff and workload

Startups, by their very nature, operate in a high-pressure environment. There is pressure to deliver a product or service quickly, satisfy investors, stand out in a competitive market and constantly innovate. The balance between recruiting new staff and ensuring the existing team is not overwhelmed is vital. Both over-hiring and over-working have their pitfalls, and it’s essential for startups to find a sweet spot between the two. Startups can overcome this hurdle by actively tracking employees’ time to make sure they don’t burn out. They may also hire part-time employees, freelancers or contractors for specific tasks or during peak periods. This offers flexibility without a long-term commitment. If possible, use data to predict growth and hire proactively. – Chase Williams, Shop my market

8. Adapting to changing market dynamics

A big challenge many startups face is adapting to rapidly changing market dynamics. Today’s entrepreneurs cannot afford to completely rely on and pursue an idea as things change overnight in the digital age. With trends like artificial intelligence, blockchain and remote work rapidly reshaping industries, startups need to be ready to survive and thrive. I remember when we were getting ready to launch a visual marketing service, only to find a new automation technology dominating the field. It was a tough pill to swallow, but I learned that the key is to cultivate a culture of continuous learning, inquiry and agility. I’ve found that regular group brainstorming sessions, attending industry conferences, and cultivating a culture of feedback can be invaluable to growing companies – especially startups. – Vikas Agrawal, Infobrandz

9. Hiring the right people

I find hiring the right people to be one of the biggest hurdles new entrepreneurs face. You need to find employees who are excited about working in a high-performance field, but who are also skilled and experienced. This tends to exclude older, more experienced people. Therefore, it is important to make your company a very attractive place to work with a flexible work culture and where your work has more impact than making profits. By focusing on building a great culture and empowering employees, you’ll attract talent that fits a startup environment. They will help you grow your business in innovative ways and take your business where it needs to go. – Blair Williams, MemberPress

10. Accounting for Regulatory Matters

For service-disrupting startups, a huge hurdle is the exact budget to deal with regulatory issues. There are many great ideas out there that can make life as we know it infinitely easier. However, where we have disruptive ideas in service, we likely also have regulatory hurdles to overcome. Great ideas, great marketing, and incredible business development teams can move an idea and a brand forward—but without a significant budget to address regulatory issues, ideas can quickly lose momentum and fall apart. Make sure that if you’re a startup potentially challenging unions or regulations, you have the budget to find a way to support your operation and innovation. – Matthew Kapala, Alphanumeric