Unique Challenges Startups Face: How to Prepare

Sara Davis avatar
on April 30#best-practices
challenges startups face

As many entrepreneurs know, there's a lot of work that goes into building your startup. But, knowing what possible challenges you face is helpful for your startup to avoid them. We've compiled a list of unique challenges specific for startups to help navigate. We've included the stories of entrepreneurs and startup owners as well. Here's what we found most challenging:

Choose the right Founders

Choosing founders to partner with to establish a business is the first step to getting off the ground. And working with an individual or individuals to create a business means you have to trust every member involved. Many friendships have been ended over business partnerships gone bad. Make sure when choosing your partners you’ve discussed any potential disagreements, or what you would do in the case of a disagreement. It’s always important to make sure legally, you have the documentation and paperwork you need in case of a bad situation - but it’s equally important to choose the right individuals who will support you and that you know you can trust and count on.

"Partnerships are critical to the success of every business. Goals can vary – you may require assistance with marketing, suppliers, or sales, or you may require additional funding, in which case a true partnership may save your company. However, you must choose reliable partners with a strong reputation. Otherwise, you run the risk of tarnishing your own image by working with the wrong people"

- Jennifer Foster, Managing Editor and Life/Relationship Coach - Authority Astrology

Managing contrasting visions for the future

"There are widespread challenges that almost all startups face usually around the management of time and resource allocation. These mundane challenges can be tackled using better communication, effective organization, critical evaluation of processes, and sometimes by just hiring advisors that are experienced in the specific field.

However, while challenges like these are ever-present, the pressure that they place on a startup is specific to that company. From my experience, having built multiple startups, I believe the greatest challenge for startups is to manage the individuals’ future vision and expectations of others to contribute to the startup as it grows. Entrepreneurs energy should be guided and managed effectively, but most entrepreneurs dislike anyone telling them what to do. The better the agreement of vision is between all contributors, the higher the startup rises before any external assistance is needed."

- Chris Bolz - coara 

Time Management

time management for startups

It takes a lot of time to build any new startup - especially if it’s on top of any other work responsibilities. As a startup, knowing where to invest your time is important. Managing your time properly will allow you to get more done.

"I learned to trust my instincts and embrace uncertainty. I look for data and concrete information to make decisions. When the pandemic hit and dramatically impacted our business, there was no data or models on how to lead through it. I’m proud of how our team demonstrated compassion and flexibility as we navigated through the many challenges. We leaned on our values, including putting employees first and making sure employees knew that taking care of their families was their priority."

- Jill Haspert, CEO of Foxtrot Marketing Group


As startups grow, delegating work and hiring team members is inevitable. But, as a startup, choosing the right team members is critical. A bad hire in the early days could be very costly. And even as your startup stabilizes, having the right team members can make a huge impact. With the right team, you can get more done and grow the business as aligned with your goals. 

“The biggest challenge I encountered while creating my startup was finding the right-minded people with whom to build a team. Having a reliable, experienced team enabled me to build the company and bring the product to market. It was challenging to find a great team by myself, so having conversations with people I trusted and who have experienced the industry first-hand was extremely beneficial. People would suggest to me other friends and colleagues that they knew and could trust, which helped facilitate more introductions and possible team members.” 

- Yaser Masoudnia, Co-founder and CEO. 

That being said, sometimes figuring out when to hire can also be a challenge. New hires are a huge cost on small businesses, and knowing whether you NEED to hire can be complex as well. Anthony Deguzman, Co-Founder of Breezeful (YCW20) experienced this particular challenge. He stated:

“It’s been challenging for us to scale a mortgage-tech company without being overly reliant on increasing head count. It’s tempting to hire for short term growth but if we build the tech to scale those operations will help us long-term. Our customers see the value of human agent servicing. We want to keep that but automate mundane tasks to increase the # mortgages per agent we can close per month.”

Steve Johnson of Bootmodfoot - a website dedicated to all things shoes and footwear echoed that statement:

"As for me, the top challenges I faced were funds management and hiring suitable people to work with me. The first staff I hired only stayed for about three weeks as they find the job repetitive or realize it's not what they want to really do. Finding people who would live and breathe your mission is challenging. It took time to look and filter candidates to avoid the same instance from happening. Some may have the skills but don't have the patience. Some would only want to try any job for the sake of having an income."

Limited resources & money management

challenges for startups

As they say, it takes money to make money. So it's no surprise that one of the most commonly mentioned issues when it comes to startups center around money.

“To start a business a few decades ago, you needed either a large sum of money or the ability to raise capital. The majority of self-funded entrepreneurs will be unable to get started. Every day, about 137,000 new companies are launched around the world. Here are several research-backed explanations why a lack of money is no longer an excuse. The cost of starting a business today is a thousand times less than it was twenty years ago. The barriers to starting a startup are at an all-time low, thanks to open source technologies and low-cost cloud-based software.

Even though the technology is accessible and inexpensive, it still takes expertise to create, operate, and market a product. Remote work has thrown jobs and entrepreneurship into disarray. Remote employees are more active, less frustrated, and less likely to leave their jobs, according to research. To start a business today, you don't need an office, computers, or long-term contracts. With a few mouse clicks, you can access the best talent. Every day, the internet makes the planet a smaller place.

Using your own money or savings to start a company is known as bootstrapping. If you don't have enough money to recruit people with complementary skills, you can save money by investing time. Even if you don't have the technical expertise to create a product, no-code tools enable anyone from any background to launch one. Often all you need to gain momentum and draw investors is the product you develop and test.”

- Chana Charach, Managing Editor - Income.ca

“I have been a full-time Real Estate Investor for 5 years now.  I can say I definitely have had my fair share of challenges while getting going.  Startup companies can face many different challenges, and for me one of my biggest ones especially when getting started is how much money to allocate for marketing and how and when to up the spending.  Lots of people try to get into my business niche and spend too much on marketing just to find themselves with no results.  Fortunately, I maneuvered through the challenges and scaled slowly and was patient, and have been successful turning over a huge ROI.”

- Doug Hentges, Owner - DH Home Solutions

"It's easy to forget, particularly when you're an entrepreneur, that the majority of startups fail. It's part of the job description to keep your eyes ahead of you and never give up, however you'll reach a point in the company's growth where you'll be bombarded with existential threats on a regular basis. Keeping afloat in times of crisis necessitates a clear mind as well as adaptable and practical decision-making abilities, which are greatly aided by knowledge of the challenges you may face. Headhunting is one of the most challenging tasks I faced when I was starting. It can be difficult, if not impossible, to find an applicant who is a perfect match for your business. To do this successfully, you'll need a simple company ethos that you can easily communicate to someone who will hopefully grow with the company, devote a significant portion of their life to it, and be with you through the highs and lows. Finding the ideal team member is one of the most challenging tasks you'll ever encounter, and it should be approached with caution. Don't be tempted to rush the process."

- Alan Harder, Mortgage Broker - AlanHarder.ca

"The biggest challenge to being the CEO of a start-up in NYC is the high cost of rent. NYC real estate is notoriously expensive and finding affordable commercial rent is a huge challenge. We overcame this problem by hiring a good portion of our employees to work remotely. Our main office is always open for training and necessary meetings but we have most of our employees work off site.

This allows us to save considerable amounts of money on expensive NYC rent but still having a comfortable office with no overcrowding for those employees that come into the office on a regular basis."

- David Reischer, Esq., Attorney & CEO - LegalAdvice.com

Pivoting direction

Pivoting direction is a norm for many startups. Pivoting direction can happen for a wide variety of reasons, but it's inevitable. Olamide Olowe is the CEO and Co-Founder of Topicals, and she shared her story with us here:

"We had originally planned to launch around March 2020 which was the start of the pandemic. It ended up interfering with our production and gathering the ingredients we needed for our products so we had to postpone. The second postponement is not really a challenge, but was definitely needed to support the Black Lives Matter Movement. We are all about being inclusive and engaged in the community needs so we postponed our launch once more to be involved. Mental health is a very important part of our brand’s mission so we decided to partner with Therapy for Black Girls during this time. We also shared how to treat your skin after being exposed to tear gas.

Although we had to postpone our launch twice, it allowed us to carefully craft our products to give great results and be fully supportive towards the fight against injustice in our community. Also, fundraising during an economic downturn is extremely difficult because no one knows how long it will last or how bad it will be. On top of that, I was a 23 year old Black woman so the stats were not in my favor to begin with. I faced my fair share of bias from investors, but ultimately, my background and my unique insights into the category got investors excited enough to back Topicals’ vision.”

Poor business planning

business competition concept men draging coins icons 6830644

Without proper planning, it makes it harder to succeed. As any startup owner knows, there is a lot to take into consideration when starting your business. Whether it's product fit, marketing, budgeting, ensuring that you have your bases covered will help you avoid running into snags.

"Startups must prepare carefully in order to get their companies off the ground. Writing a structured business plan based on a vague requirement of some organizations is suicidal in today's technical environment. Since they do not effectively factor in obstacles and pitfalls, many companies struggle in their first year due to poor planning. Startups that have ambitious ideas and goals but lack perspective in their business plans are doomed to fail or must constantly devise and modify them..


Before starting a company, it's critical for entrepreneurs to conduct comprehensive research on everything from suppliers to taxes to competitor prices. This strategy is the foundation of a successful company, and it must be presented as a whole in order for the product vision to be matched with the identified target audience. Writing a good SBA business plan will help startups identify their business, the market they represent, how they will operate, and how much money they will make and spend."

- Darshan Somashekar, Founder & CEO - Solitaired

 Understanding competition

“The one we mainly faced as a startup is the instantaneous and high expectations in achieving results. We had a great idea and strategy, but we might have missed noting how tough the competition is. Everyone who starts a business really expects success. Sometimes, we fail to recognize other potential obstacles as we proceed. And this is understandable because most of us would have the mindset to look on the positive side. The digital world is evolving fast, and if your business is on a digital trail, always think that there might be thousands of like-minded people who had launched their ideas ahead of you. Research is essential, as well as series of testing"

- Mark Stephenson, HowtoShoe

"I think a huge challenge that I share with many early-stage startups is the difficulty in breaking through and getting sustainable, organic traffic.  The way the system is set up currently, search engines like Google favor already established companies and breaking into the top rankings takes a ton of work writing content, giving things away for free, media outreach, etc.  Startups are starting from a huge hole they have to dig themselves out of, and until you do that you are at the mercy of trying to go viral on social media or paying for traffic that will be unsustainable in the long term."

- Greg Dickens, Founder of Epilocal 

"While building our own startups, we face many, many challenges. But, the two most important ones are a) validation of your idea and b) understanding the processes to market your product. Firstly, validation of ideas is essential so that you can build the most impactful, minimal product possible to take to market. However, the challenge is that there's not enough information out there or process or tools to help very quickly. Us entrepreneurs need to take a second to understand the market opportunity and figure out how to validate our solution with customer surveys or other ways. 

Second, many startups are keen on pushing the most important minimal product you can take to market. In the emerging startup world, much emphasis is put on “minimal product to market,” but not enough on the process. The challenge is to learn and seek guidance on how to get past that hump between validation and sales or ideation in sales, where you got to validate, you got to market test. You got to see some traction before you can go to market with a full-blown product."

- Sathish Bala is the founder of Schoolio

Gaining reputation

Reputation management startups

As a new business, gaining awareness and building trust is critical to getting new customers. Startups specifically, as they are entering the market run into this issue as they build their brands.

"The biggest problem we had when we launched was winning over customer trust. Our products are all bespoke and high-quality, so we're more expensive than a lot of our competitors. It was tough trying to convince people to spend the extra money on our furniture even though it's higher quality.We looked at our conversion analytics and saw that lots of people were visiting and re-visiting our site without ever completing a purchase.

It's hard to try and measure customer trust, but we tried out a few things that I think helped us. For one, we rearranged our frontpage to more prominently display our returns and guarantee policy. I think this helped because it showed people that we were willing to back our product up. We're proud of what we do, and we show it off."

- Chris Campbell, Partner - The Charming Bench Company

"Launching a new-to-market consumer product comes with many challenges.  Our brand, Vitaminis, offers 2.5 fluid ounce drink shots for children's immune system support.  Because this is a product that doesn't currently exist in the market, retailers don't know where it fits.  For example, is it a supplement, or a beverage?  Meanwhile consumers require some education as to how to use the product (offer it at breakfast or with a snack, mix it with a smoothie, or toss it in a lunch box).  While education is an upfront challenge in scaling the brand, I think it's validating that this is a whitespace in the market."

- Leslie Danford, Founder - Vitaminis LLC

"One of the biggest challenges Emjay faced when trying to grow its customer base was differentiating itself from other legal dispensaries in California. Emjay has two flagship locations in California but we mostly earn our revenue through our online retail and delivery service. Delivery services are in competition because of their delivery fees and cost of the product.

Emjay's model is that our company owns the infrastructure and delivery service. The difference in our practice, which makes us the leading cannabis delivery and retail operator in California, is that we do not charge delivery fees and the cost of the product to be delivered is the same as what it would cost a customer to pick up at one of the retail locations. This practice establishes trust in the consumer and employees. "

- Chris Vaughn and I’m the CEO of Pacific Consolidated Holdings (PCH)

By knowing what to prepare for, you know more of what to avoid. What unique challenges has your startup faced? We'd love to hear from you. Send us a line or drop us a tweet to share your story with us.

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