Launching a startup is hard work — with no guarantee that it will lead to a thriving, profitable company. In fact, 20% of new businesses fail within the first year, according to the U.S. Bureau of Labor Statistics.
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How do you avoid joining that statistic? GOBankingRates spoke with three experienced entrepreneurs to determine how to overcome some of the most common roadblocks to running a startup.
In interviews with over 80 founders of failed startups, Failory found that 16% failed due to financial problems.
Thankfully, that wasn’t Valentina Fonseca Krug’s story. As founder and lead designer of the tabletop décor company Lola Valentina, Krug encourages founders with low funds to focus on networking. For example, in her company’s early years, it didn’t have the budget for professional photography.
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“This was a problem because our products were so visual,” she said. “We were also building our brand, so we needed to be very active on social platforms but didn’t want to post the same event photos or product photos over and over again. … It was paramount that we foster relationships with other vendors and then give credit to them on our platforms.”
This tactic allowed Krug to collect numerous professional photos of her products as well as expand her client 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 to 100 per week.
But overworking for an extended period has consequences. Those who work over 52 hours per week face a greater risk of cardiovascular disease, according to a 2020 study published in the Asia-Pacific Journal of Public Health. Another 2020 study revealed that those working 51 to 60 hours per week were more likely to suffer from depression and suicidal ideation.
Ray Blakney, CEO of the Live Lingua online language school, said working long hours is inevitable for most new founders. But doing so long term is a recipe for burnout.
“I did this for three years — no vacation days and working day in and day out,” he said. “Honestly, I did not feel burned out. But my wife saw it. Without telling me, she booked us for one week at an all-inclusive resort in Mexico and told our team to handle the business.”
At first, Blakney felt stressed about leaving his company. But, during his vacation, he was finally able to decompress. While he was away, his company had one of its most profitable weeks.
To prevent burnout, Blakney recommends three habits:
- Set a strict work schedule: Give yourself firm start and end times for work and guard your off hours.
- Make time for your hobbies: Make it a priority to do something every week that re-energizes you, whether it’s pottery classes, a hot yoga session or just relaxing on the couch with a great book.
- Take a week-long vacation once a year: Be sure to disconnect from work entirely during this time — no phone, Slack or email.
Delays are a frustrating but inevitable part of running a startup. Clients stall, technology breaks down and investors make additional time-consuming requests.
“Things will take longer than you think,” said Davis Nguyen, founder of My Consulting Offer. “There’s unknown work that comes up that you don’t predict when you’re building project roadmaps.”
When facing those setbacks, it’s easy to become discouraged. Nguyen recommends finding your “why” to motivate you to find innovative solutions for project delays.
“Have a reason that’s stronger than just ‘I want to make money’ when starting your company,” he said. “If money is your only driver, you will lose motivation and enter ruts often.”
Blakney said many startup founders may feel pressured to make every element of their business perfect. Not only does this create more delays, but it also can foster a mentality of constant defeat.
“It’s crucial not to get bogged down by perfection,” Blakney said. “If you have a business idea, go ahead and create a website that promotes it. Don’t fret over everything being perfect — just forge ahead and launch your idea, then see what feedback comes 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 best SEO and digital marketing practices, which led to several mistakes they had to correct later on.
This taught her an important lesson: Wherever your knowledge and talent are limited, hire experts who can help your company thrive.
“It’s extremely valuable to know your limitations,” Krug said. “You don’t know what you don’t know.”
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