You will encounter multiple challenges when running a start-up company, and sometimes these challenges may be overwhelming. Here are some common challenges start-up companies tend to encounter and some of our recommendations in order to mitigate these challenges:
- Time management
Not all companies have the same amount of capital. However, they are all given the same 24 hours in a day. Time is an extremely important asset for new businesses and it is crucial for their growth. Efficient time management may become a challenge for businesses.
Our suggestion: Plan out specific goals that the company would like to reach in a given time interval (either daily, weekly, or even yearly), plan ahead meeting times and deadlines for specific individuals, have a to do check-list, and make sure to take breaks (study has shown that taking breaks allows for less stress, better focus, increases overall productivity).
- Expertise
There are multiple aspects of areas to focus on when running a business, whether that is the company’s logistics, marketing, customer relationship, finances, etc; and it’s difficult to be experts/ have the appropriate personnel for every aspect of the business operations.
Our suggestion: Don’t be afraid to seek help, approach everything with an open mind and willingness to learn, and take the time to learn about important aspects of running a business.
- Increasing revenue
In most instances, this is the most challenging aspect for a lot of start-up companies. There isn’t just 1 definite solution to solve this issue and it’s also one of the main key performance indicators for an organization; and that’s what makes it so challenging. Not having an exact solution as well as future uncertainties are the main reasons why companies experience so much stress and pressure in this aspect. Although there isn’t one solution to the answer to this question, what’s important is to understand what works and what doesn’t for your company.
Some of our general suggestions include: have appropriate marketing, specialize at what you do, create innovative products, etc.
- Building relationship with customer
Returning customers are extremely crucial for any businesses success. It is a crucial factor in achieving any long term profitability goals. According to a Harvard Business school study, increasing customer retention rates by just 5% may lead to an increase in profits by around 25% – 95% (Reichheld & Schefter 2000). Not only would loyal customers make multiple transactions over time, but they may also recommend your organization to others, which may further drive up the organization’s revenue.
Our suggestion: emphasize the importance of customer service to your organization, create customer loyalty programs, and try to connect to customers on a personal level (know your boundaries of course!)
- Tax implications
The Canadian tax system has always been confusing, especially for a start-up company. Despite the complexity of the tax system, strategic tax planning is so important, and can potentially save businesses tons of money on taxes.
Our suggestion: Check out “Canadian income tax manual” on our blog page to have a better basic understanding of the Canadian income tax system. You may also consider reaching out to a tax expert as it may also be beneficial as they can provide you peace of mind regarding any tax implications, and can prepare different tax saving strategies in order to lower the tax expense for the company.
We understand operating a start-up company is not an easy task to do, and it’s normal to feel completely overwhelmed. Don’t be afraid to seek advice and guidance when a challenge occurs, and remember that you are not alone.
Resources used:
E-loyalty: Your secret weapon on the web. Harvard Business Review. (2014, August 1). Retrieved February 25, 2022, from https://hbr.org/2000/07/e-loyalty-your-secret-weapon-on-the-web
