Business Start-up Challenges


Starting a business comes with its fair share of challenges. While many business owners often site a lack of capital as a major stumbling block, there are a range of other business start-up challenges that are common to many entrepreneurs.

It’s important to identify these and to find ways to address them or avoid them altogether if possible.


As a start-up business, competition is often fierce. But the best way to overcome this challenge is if start-ups can find a niche market and differentiate themselves from their competitors.

Very often, switching costs for customers are low and many of them are willing to try new technologies. It’s important to find ways to complement existing products, so that you gain easier entrance into the market.

Client Dependence

Barriers to entry may mean that a single client may make up more than half of your income. This makes you more of an independent contractor than a business owner.

As a start-up business, diversifying your client base can be quite challenging. It may take quite a while before you are able to get more clients, on whom you can rely for income.

Money management

“Poor cash flow management is causing more business failures today than ever before,” says Philip Campbell, a CPA and former chief financial officer of several companies and author of ‘Never Run Out of Cash.’

Running out of cash makes growing a business impossible, so it’s important to make sure that as a business owner you have a system in place that allows for efficient money-management. To avoid falling trap to one of the most common business start-up challenges, keep in mind that the complexity of a business increases with each new clients and employee.

Founder dependence

A business that can’t operate without its founder is likely to fail. The founder must be able to let go of certain decisions and responsibilities as the business grows.

Redundancy and firing

A challenge faced by many business owners is having to deal with difficult human resources situations. For many business owners the decision to let go of staff members in redundant positions is challenging because these are people you have got to know really well.


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