Startup Scaling Hurdles To Avoid (And How to Fix These)!

No one said getting a startup going is easy. About 150 million startups appear every year globally, with some 50 million new ones added annually to the list. Moreover, around 137,000 new startups are launching daily. But even though there are numerous new startups, many don’t survive.

70% of startups will fail, and the figure is even higher for tech startups – 74% will fizzle out. These new businesses can’t handle the challenges thrown at them. In this article, we will explore the challenges startups face and look at how to overcome such challenges.

Challenges encountered by startups (more so during the process of startup scaling)

Brutal competition

The business world can be aggressive, with endless and ongoing competition, leaving only the strong to survive. Competition is one of the leading challenges for startups. However, this challenge is even more formidable for online or eCommerce businesses.

In this environment, startups can’t afford to make the wrong move or waste a cent. Startups that survive are both aggressive and creative. During their startup scaling process, they must also make intelligent moves to outwit the competition, even from established businesses; it is not an easy feat, but it is possible. 

startup scaling business

According to research studies, you can start by getting to know your customers better – it sounds simple: 80% of businesses don’t know their clients. Start by building a stronger relationship with your customers, and do this by harvesting data.

The more data you have on a client, the better you can predict what the client will like. You can thus upscale items that match their interests and send them customer-bespoke promotions, retaining them longer in your buyer’s funnel

Also, understand your competition. You can do this through simple online research and keyword search tools to follow better what your competitors are doing and what they are not doing.

Then, when you know your competition, you need to ask whether you know yourself − do you know what sets you apart from your competition? This is what makes you unique and what your customer looks to find.

Then, it’s time to design your message based on your brand research and identity. Once this message is ready, you must effectively market it to your target audience. Note that the target is your market, specifically. If you target the world, your marketing efforts will not be directed to your clients, and your sales will be weak.

Unlikely expectations

One can’t blame entrepreneurs −they are dreamers − but you must have realistic expectations during the startup scaling process. The issue for startups is that there will be a period when things will boom; in most cases, that will lead to venture capital investment.

However, then unrealistic expectations can also arise and cause problems. Success can be short-lived, and the situation can change. The expectations also need to be adjustable to ensure that the growth is sustainable when going through the phase of startup scaling. This can be a challenge, especially with startups dealing with competition; this distraction impedes growth.

startup scaling needs partnership

Startups tend to face challenges when they set ‘unrealistic expectations’ following a booming success. Remember, success is short-lived, and expectations never end. This is where startups should translate what the real expectations are. Sustainability is the name of the game. And sustainability requires consistent effort.

You should be aware that venture capitalists will invest in 1-2% of startups, which are those they are exposed to. Most venture capital is invested in companies that have moved beyond the startup phase.

Consider other funding, such as crowdfunding and alternative staffing solutions, which means looking at outsourcing. Outsourcing is a clever move − you can save 70% of a wage if you outsource.

Hiring the right people

One of your most significant expenses will be staffing costs – and when it comes to a startup, a key element is onboarding staff that will fit in with the company culture. This means finding people with the skills to work and have a similar outlook on life. Thus, your output will also grow if you build a strong team.

However, finding the right people can be difficult. Also, to keep them can be a challenge. A solution is to source great people to handle your core work and be prepared to pay them well. Then, remove the time-consuming work, especially the mundane and repetitive tasks, and outsource these. You will find that your highly-paid staff will have more time to focus on their core work, and their productivity will be higher. The outsourced tasks can be achieved at the least expense. Your savings can be reinvested in your company as you scale up.

Know when to fire yourself.

As the CEO, it sounds odd to fire yourself; however, this might be the right choice sometimes. Yes, you founded the business, and it is your idea, but your weakness may lie in managing staff and delegating tasks. Many companies fail by destroying themselves from within rather than by the competition destroying them.

Such businesses are not able to delegate properly. They may never have learned how to do this, and accurately, there is also a lack of trust. Also, some CEOs tend to micromanage their teams, getting involved in all the small details and forgetting the bigger picture. However, just as you want your staff to trust your leadership, you need to trust the people you hired to do the work you selected them to do.

Winning the trust of customers

Many businesses, such as tech startups founded by engineers, will draft their marketing messages in known tech jargon. Yes, they and their friends understand the message well, but does the client? Most likely not, unless you are selling to another engineer. Also, startups fail to invest in their customer care. However, building a robust and loyal client base means looking after your clients and giving them the best service ever. This is important because clients will go to a business that offers excellent service, even if the company is slightly more expensive than the competition. You can increase your prices if you increase your customer service.

If you are starting or lack the funds to invest in a call center, you can outsource the work to a virtual assistant to help you with your customer service tasks. This way, you can offer excellent service and keep your costs low. This is what scaling is all about – growing but not increasing the losses.

Embed a customer-centric working philosophy into your business, and ask your staff members to echo this mantra.

Nothing can be solved overnight (it’s a process: startup scaling)

Starting up a business involves hard but smart work. You can also not do it alone − you need support. Ensure that you select your partners or supplies based on price and the reliable service they can offer.

Outsourcing is a great solution to cut staffing costs and boost morale among core staff members.

Our advice: Don’t hesitate to book a call with Aristo Sourcing! We are well-placed to help you and your startup to scale up successfully.

The Ultimate Outsourcing Guide:

Aristo Sourcing Dark Yellow

Looking to Build a Remote Team?

Get FREE Consultation.