5 Biggest Threats Start-ups Face Now
There are a lot of ways for a fledgling company to falter in its early days. Too many unique obstacles to name, I'd wager. But at any given time, businesses also face a number of common challenges.
To find out the biggest problems facing entrepreneurs today, I went to The Alternative Board (TAB), a peer board helping thousands of business owners connect and gather insight and advice. TAB surveyed 300 of its members. Here's what they identified as the top five biggest threats to their businesses:
A whopping 57 percent of TAB business owners identified government as the No. 1 threat to small business. Owners are worried about tax regulations, the limited number of grants and loans, marketing restrictions, and other rules and regulations. Still, 60 percent of business owners said they feel economy has improved since last year.
Thirty-seven percent of entrepreneurs identified sluggish demand as the biggest threat to their start-up. It doesn't matter how many positive signs economists think they see: Without customers, businesses can't grow.
If this is one threat you're particularly worried about, spend some time improving your online marketing. Strategies such as blogging, social media outreach, and search engine optimization are all great and inexpensive ways to increase your marketing efforts, especially because you can easily track their success.
A total of 22 percent of TAB members identified lack of capital as the biggest threat to their business.
There's no easy answer to this problem, but more and more product companies are turning to crowdfunding to bridge the gap. Consider successful projects like Hand Stylus and others. In just over a month, Hand Stylus raised $313,490, far exceeding its original goal of $25,000. Consulting with an angel investor, accelerator, or venture capitalist is another option.
Twenty-two percent of TAB entrepreneurs cited increased competition as a major threat to their success. The solution to this problem? Build a better brand. Credibility often starts with a great website, a focused online marketing strategy, and media coverage. Just as important, make sure you clearly communicate why you're in business--not just what you do. Instead of "We build websites," go for something more direct and goal-oriented: "We help businesses grow."
With looming changes requiring businesses with 50 employees or more to offer healthcare coverage come next January, it's no surprise that 15 percent of TAB members are worried about footing the bill. In the coming months, you must decide if you're going to cover all of your full-time employees or yank your coverage and pay the penalty. But there may be a third option. Check out fellow Inc.com contributor Gene Marks' informative post that explains an alternative.