Launching a startup is hard work – with no guarantee that it will lead to a successful and profitable business. In fact, 20% of new businesses fail in the first year, according to the US Bureau of Labor Statistics.
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How do you avoid joining this statistic? GOBankingRates spoke to three experienced entrepreneurs to find out how to overcome some of the most common obstacles to running a startup.
In interviews with over 80 failed startup founders, Failure found that 16% failed due to financial problems.
Luckily, that wasn’t Valentina Fonseca Krug’s story. As the founder and lead designer of the table decoration company Lola Valentine, Krug encourages founders with low funds to focus on networking. For example, in the early years of her business, she didn’t have the budget for professional photography.
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“It was a problem because our products were so visual,” she said. “We were also building our brand, so we had to be very active on social platforms, but we didn’t want to post the same event or product photos over and over again. …It was paramount that we nurtured relationships with other vendors and then gave them credit on our platforms.
This tactic allowed Krug to collect many professional photos of its products and expand its customer base, without breaking the bank.
Overwork and burnout
In the early stages of starting your business, you may find yourself working long hours – perhaps 60-100 a week.
But overworking for an extended period has consequences. Those who work more than 52 hours per week are at greater risk of cardiovascular disease, according to a 2020 study published in the Asia-Pacific Journal of Public Health. Another 2020 study found that those who worked 51-60 hours a week were more likely to suffer from depression and suicidal ideation.
Ray Blakney, CEO of Live language online language school, said working long hours is unavoidable for most new founders. But doing it long term is a recipe for burnout.
“I did this for three years – no vacation days and day to day work,” he said. “Honestly, I didn’t feel exhausted. But my wife saw it. Without telling me, she booked us for a week at an all-inclusive resort in Mexico and told our team to handle the deal.
At first, Blakney felt stressed about leaving his company. But, during his vacation, he was finally able to decompress. During his absence, his business had one of its most profitable weeks.
To prevent burnout, Blakney recommends three habits:
- Set yourself a strict work schedule: Set firm start and end times and monitor your off hours.
- Take time for your hobbies: Make it a priority to do something every week that re-energizes you, whether it’s pottery class, a hot yoga session, or just relaxing on the couch with a good book.
- Take a week off once a year: Make sure to completely disconnect from work during this time – no phone, Slack or email.
Delays are a frustrating but inevitable part of running a startup. Customers stagnate, technology breaks down, and investors make time-consuming additional requests.
“Things will take longer than you think,” said Davis Nguyen, founder of My consulting offer. “There’s unknown work coming your way that you can’t foresee when building project roadmaps.”
Faced with these setbacks, it is easy to become discouraged. Nguyen recommends finding your “why” to motivate you to find innovative solutions to project delays.
“Have a stronger reason than just ‘I want to make money’ when you start your business,” he said. “If money is your only driving force, you will lose motivation and often get into ruts.”
Blakney said many startup founders may feel pressured to make every element of their business perfect. Not only does this create After delays, but it can also foster a constant defeat mentality.
“It’s crucial not to get bogged down in perfection,” Blakney said. “If you have a business idea, go ahead and create a website that promotes it. Don’t worry about everything being perfect – just go ahead and pitch your idea, then see what comments come in.
Sometimes startup founders are their own worst enemies. Krug says it’s easy for entrepreneurs to overestimate their abilities, which only hurts them in the long run.
For example, her team did a great job designing Lola Valentina’s first website. But they didn’t understand SEO and digital marketing best practices, which led to several mistakes that they had to fix later.
It taught him an important lesson: where your knowledge and talent are limited, hire experts who can help your business thrive.
“Knowing your limits is incredibly valuable,” Krug said. “You don’t know what you don’t know.”
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