Nashville-based professional Scott Sohr has established himself as an investor, entrepreneur, and start-up guru. Through his involvement in STS Venture, Scott Sohr has contributed to the development of over 13 start-ups in the healthcare, technology, real estate, and environment sectors.
Starting a business is a major step, hence, entrepreneurs should be aware of the challenges they may face when starting a new business. Below are some of the common start-up problems that one might encounter in the initial days of the venture:
1. Lack of funding – One of the biggest challenges for the start-up entrepreneur is financial. A past study shows that over 79 percent of small businesses failed because they had too little start-up capital. The lack of capital is attributed to entrepreneurs failing to look at the worst-case scenario and being too optimistic without provisioning adequate cash flow or the possibility of slow sales and poor market conditions.
2. Incompetent human capital – It is important to gather the right team to oversee the company’s management; a competent staff is a must for a successful future. A good team should be able to design a good business module and provision better financial management as well as understand market needs and help produce products accordingly. Nevertheless, finding the right team can be quite tricky, as the start-up may initially lack adequate funding.
3. Making connections – In business, networking and professional connections play an important role in building trust and broadening business opportunities. However, for small start-ups, it is a challenge to provide a service and simultaneously extend its network. Hence, it is necessary for start-ups to plan ways to meet their needs with minimal time and financial resources.