5 Common Startup Challenges (And How To Navigate Them)

It all starts with a big idea, the one that comes to you like a lightbulb over your head. But starting a business requires more than just that big idea, and that’s where founders can get stuck. While every startup is different, there are 5 shared challenges that most startups face. But that’s not all — we’ll also highlight some ways to help you navigate them and grow your business with confidence!

1) Building a Customer Base

Your big startup idea might be really, really good. But how can you grow your business without customers? Unfortunately, you can’t. Customers are a crucial part of a successful business. The challenge, though, is finding those customers.

Lots of entrepreneurs have a tough time taking their products or services to market. Finding the optimal channels and zeroing in on the right audience can be an involved and lengthy process, not to mention costly.  Many of the solutions out there — ad buys, social media, PR, newsletters, content strategies — can cost a pretty penny, and capital is almost always a concern for small business founders.

What about a free way to market your business? The cold email  appears to have made a comeback. Recently, the founder of PressPulse  used cold emailing to sign 1,700 new customers within 6 months. While this approach may not work for every startup, and it may take some hard work and perseverance, it’s worth a try for scrappy founders.  For MWBEs, or Minority and Women-owned Business Enterprises, many states have business directories that yours can be added to that can help increase exposure. 

2) Lack of Funding

As we mentioned above, funding is almost always a priority for startups, and the current economy isn’t helping. Getting a startup going can be quite a task, and one that often requires more funds than the average person has saved in their bank account.

While investors are a great resource, in today's financial climate, they’re likely to be extra cautious with their funding. Applying for small business grants is another option, but doing so can require a bit of research and legwork. Check out this list of specialized grants from the U.S. Chamber of Commerce to start your research and get on your way to making your start up dreams a reality. 

3) Cost of Living & Inflation

For many Americans, the increased cost of living has been tough to deal with. The cost of housing, groceries, household goods, transportation, entertainment, and more continue to rise, leaving many struggling to make ends meet.

This applies to business owners as well. Increasing the cost of supplies, equipment, labor, and upkeep can add up quickly. For startups, this can mean the difference between staying operational and shutting down. Inflation can be hugely impactful to entrepreneurs, and the top concern for almost a quarter of them, according to the NFIB Small Business Optimism Index.

How does one offset this startup challenge? One idea is to look at your profits. Determine which products or services are pulling in the most revenue, and consider limiting what your business offers to what’s most profitable. Companies like Tres Leches did this and watched their business grow in ways they’d never imagined.

4) Time Management

Time management can be tough for any growing company, but especially a startup. It’s easy to become disorganized when a small team (or team of one) is responsible for PR, product creation, social media management, HR and so much more. Free project management tools such as Google Calendar, Slack and the smaller personal plans of tools like Asana and Trello are a great place to start. As your team grows, you will have to move off the personal tier, but in doing so, you’re establishing a source of truth for your team and creating a dedicated space for tackling projects and mapping deadlines.

Also remember, communication is key. Regularly reviewing and adjusting goals based on progress and feedback can also help ensure that time is being used effectively and that the business is moving in the right direction.

5) Hiring Quality Talent

One startup challenge that may come as a surprise is the lack of quality talent. The NFIB Optimism Index also noted that 19% of small business owners reported a struggle with finding quality, or any, candidates. Despite the resounding cries of eager job applicants, there seems to be a disconnect between candidates and small business employers. But Reddit users in the /startup and /smallbusiness communities echo the NFIB findings.

With hiring being one of the biggest concerns for founders today, it might be worth considering some help. Some founders start with one hire and grow from there. Having a co-founder or business partner can help offload some of the mental load and time and energy commitments, and they may also have helpful insights when it comes to future hiring decisions.

Another approach you can take is becoming more attractive as an employer. Candidates are looking for more from their employer — salary is key, but so are benefits, perks, paid time off, and remote or hybrid work options. It can be helpful to spend some time researching your competition to understand what they’re offering candidates so you can adjust your benefit package accordingly.

How Justworks Can Help

Justworks offers a number of services within our PEO and Payroll offerings, designed to help streamline your growing business, from compliance support and payroll, to HR tools and access to benefits. That extra time and money can be invested in growing your startup. And what’s better than that? Get started with Justworks today and grow your business with confidence.