Challenges and opportunities that await startups today
- Last Updated : December 5, 2023
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- 5 Min Read
Being your own boss is a common desire. The freedom to make your own decisions and work at a desired pace has motivated many to embark on this exciting journey. Though anyone can become an entrepreneur in any field with careful research and planning, the real challenge lies in turning it into a profitable business.
The Australian Bureau of Statistics (ABS) shows that, in recent years, startups have closed down at an alarming rate in Australia. Between the years 2022 and 2023, almost 386,392 startups stopped operating, which is up from 305,085 in 2021-22. While there can be many reasons responsible for startups failing, it's essential for aspiring entrepreneurs to equip themselves with the necessary knowledge to tackle the various complexities involved. This blog post will discuss the multiple challenges and opportunities that await startups in the present conditions.
Challenges for startups
Facing experienced competitors
For any aspiring entrepreneur, it can be intimidating to start a business among established competitors who have significant experience in the industry. These seasoned players will have extensive market knowledge and know the intricacies of how to keep their business profitable in changing market conditions. Before fully committing to launching your business, it's crucial to invest time in studying your competition and their strategies. Identify who holds significant market share, what are some of their biggest selling points, and how different their business is compared to what you are planning to do. Assessing their strengths and weaknesses can help you identify gaps you can leverage to create a new target audience.
Even if you happen to stumble upon a business idea that has no direct competitors, you must dig deep to find out why there has been a lack of demand in the market and why no one has capitalised on this opportunity.
Read our blog on six ways to gain market share and stand out from your competitors to learn more about this concept.
Winning customer trust
Gaining customers as a new business in a competitive market requires a strategic approach. You must be willing to face the fact that it's going to be an uphill battle not just to find new customers but to convince those who are already loyal to other businesses.
To overcome this challenge, you must consistently demonstrate your expertise to reassure your target audience that you are good at what you do. Whether it's going the extra mile in customer service, or practising transparency in your operations, you need to come up with new ideas to highlight your unique selling proposition. This will help people organically recommend your business and encourage others to give your business a chance.
Getting funding for your startups isn't as easy as it used to be. The recent deflation in the startup bubble, which led to the collapse of numerous startups that were overvalued, has instilled a sense of scepticism among investors. This, coupled with the ongoing economic downturn, has made investors slow down and not easily commit to riskier ventures. This means, as a startup, you must step it up to demonstrate a strong business model and provide compelling evidence to support your pitch to attract investors.
Finding reliable hires
The individuals you first hire in your startup will play a significant role in determining your growth. Unlike larger organisations, you may not have the luxury of having multiple individuals to shoulder responsibilities and fill in the gaps. Therefore, you need to find individuals who share a passion for what you do and are willing to commit to the journey long term. During the hiring process, have a candid discussion with your candidates to share your vision for the company and what expectations you have for them. This open communication will help you identify individuals who align with your expectations and are capable of contributing positively to your startup's growth.
Opportunities for startups
While there may be many challenges that startups face today, it doesn't come without a silver lining. Statistics from the Shopify Entrepreneurship Index show that Australia ranks first within the Asia Pacific region and sixth globally in terms of the impact entrepreneurs create on the economy. This can be due to the ease of establishment and various opportunities presented to startups in Australia. Here are some key opportunities that facilitate the growth of startups today.
Government support and availability of resources
Recognising the importance of entrepreneurship, the Australian government has been implementing various grants and assistance programs to foster a supportive startup ecosystem. These initiatives cater to startups in diverse stages of development, recognising the multiple challenges startups may face. The eligibility to take advantage of this support is based on the program and what territory they belong to—be it local, state, or federal. In addition to government support, there are various private entities, including startup incubators and organisations, that offer free guidance, training, and resources to help navigate various challenging scenarios.
At Zoho, we support entrepreneurs through our Zoho for Startups program. The program is designed to empower our passionate startup community with the software solutions they need to grow and succeed.
Access to a global market
The internet has made it easy for anyone to start a business. Today, there are various platforms and mediums available that serve as launchpads for aspiring entrepreneurs to experiment with new ideas and implement them on a global scale. Startups can establish and run a fully functional business regardless of where they are. This flexibility has not only helped expand potential customer bases, but also opened up opportunities to diversify revenue sources. By expanding globally, startups can also effectively reduce the risks associated with relying solely on a single target market while simultaneously accelerating growth.
Leveraging the gig economy
The gig economy has now modernised the way businesses operate. The freedom to work when and for whom they choose, at their desired pay rates, is one of the biggest reasons for the industry's growth. For startups, this presents various opportunities to scale and keep overhead expenses at tab without having to commit to hiring full-time employees. Whether you need a UI designer for a one-time project or a business manager to assist you for a month, you can select from a vast pool of skilled contract workers, virtual assistants, or freelancers from almost any job sector.
Changing customer preferences
People are becoming very conscious of buying choices and their expectations from brands. Startups can use this opportunity to identify needs that haven't been met and come up with new solutions to address them. This means you should put in great effort to understand the target audience's behaviour, figure out what changes people need, and test and try new ideas to meet their expectations. Startups can also play a role in educating consumers on what they haven't been aware of and motivating behavioural change. This can even help create a new market that never existed.
We hope this blog has given you valuable insights into the current opportunities and challenges startups face today. Are there any more points you think we've missed? Let us know in the comments.
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