Business Blog

5 Factors That Can Negatively Impact Your Startup


5 Factors That Can Negatively Impact Your Startup

Every startup has its own ups and downs while it finds its feet. Some more than others and often each business’ challenges are unique. However, some factors can influence any business.

1.Timing

Timing is everything and business is no exception - ultimately, timing is a big factor in your startup's success or failure. There are a few ways that bad timing can kill your new startup. If you spend too long on your initial development process, you stand to lose some of your competitive ground. Make sure you divide time equally between development, creating your dream team and creating a business model.

Things can also grind to a halt if progress becomes too slow for your liking, but then, you also risk failure if your work too fast, and perhaps end up releasing a faulty product or sub-par service onto the marketing. Timing is a balancing act, so make sure you get the balance right.

2.Competitors

Competitors are always going to be a challenge to your business, no matter what stage you’re at. But, for small businesses, competitors can be the difference between success and failure. The obvious way that a competitor can hurt your business is by taking away potential customers, and while it is an obvious one, it is still one to consider.

Sometimes when potential investors see that you’re competing with a certain company, this can scare them off from investing. Competitors can also steal the star employee talent in that field, especially if you’re competing in a niche where there are only a few candidates you’re looking for. They can also raise market expectations in your industry, which puts more pressure on you, even as a startup.

3.Debt

Debt can often kill a startup’s chances for funding before investors even see their executive summary or business plans. While unintended (and possibly untrue), statements of debt or funds that are still owed point the investor to a single conclusion; you cannot effectively manage money and are not a smart business investment.

Not only will debt make you a bad investment, but it will harm your credit rating will affect any kind of loan you can take out, for personal or business use, as well as affecting the interest you might have to repay. You will also accrue Interest on existing debt. For these reasons, you should be looking to reduce your debt somehow, not increase it – and do so as quickly as possible before it can have too much knock-on effect on your business venture!

4.Investors

As a founder, you must manage your investors and find a way to strike a balance between appeasing them by taking their insights on board and letting them have too much control of your business. The reality is that the more you take from an investor, the more control they’ll want.

If things are going well, this shouldn't matter. But things don't always go smoothly in startups and investors can be one of the biggest hindrances as well as the biggest help for a startup. When you start letting them have too much managerial control or input in the plans of the business, this is when things can tat to go south very quickly.

5.Passion

Passion and enthusiasm are qualities that are desirable for someone who is trying to get a startup off the ground. But, it is important that with these qualities also comes realism, as passion can often be confused for overly optimist expectations. Too much passion can be your startup’s downfall. When you are too passionate about your own business, you can be prone to be blinded by optimism which makes you less likely to be subjective about skills and qualities you may be lacking in and need to improve.

You may also be unwilling to extend your reach out with your niche as you think you can definitely succeed in the one area. You are more liable to forget about your personal circumstances as you are putting everything into making the business – this can lead to bad physical and mental health and the breakdown of relationships outside the business.


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