NAME: UNEEB WASEEM

REG NO. : 2143243

ASSIGNMENT NO. 02: BRM

SUBMITTED TO: Ma’am LEENA REHMAN

TOPIC: CHALLENGES FACE BY STARTUPS

One of the most significant challenges that start-ups need to overcome while entering a new market is to decide
the ideal market entry method. This can have great consequences on future business to the company.

There are two possible options. The first is to directly or indirectly export to this new market, while the second
option is to open a new sales and market office in that location. This decision does not depend upon the size of the
company but on the business strategy defined for the company’s expansion. There are a number of factors which
determine the strategy to employ including international experience requirement, management focus, speed to
go-to-market, financial commitment and the risk profile of the company.

Difficulty scaling up

Many small businesses and tech startups are caught by surprise when they're successful. Many have no plan in
place to scale up responsibly and effectively, and others get swallowed up in attempts to raise funds.

Realize that too much money and stifling external control in early stages might rob you of the joy of nurturing your
fledgling business. If you have achieved product-market fit, have a scalable product and a smart and cost-effective
sales channel in place, then it’s the right time for you to scale up.

Retain Customers

Many entrepreneurs become so focused on creating new customers that they fail to address a strategy for
retaining customers they already have. We know that it is twice as easy to sell to existing customers then sell to
brand new customers? Existing customers also create a dramatic affect to your bottom line. A small five percent
increase in customer retention will increase your profitability by 75%. 80% of your company’s future revenue will
come from just 20% of existing customers.

A weak team

A talented, passionate and responsible workforce forms the basic foundation of a successful startup. So right from
day one, your aim should be to hire and train the most effective people who will be able to take on bigger roles
and run the show (even when you’re away) as the business grows.

Hiring decisions need to be made with care. If you feel you don't have the time, ensure you take external help and
guidance.

Impact of culture

Culture has huge impact on business and it is imperative for an entrepreneur to immerse himself in the culture of
any new market in order for his venture to succeed in that market.
Legal

There are two major challenges when it comes to legal considerations while going global. The first is to understand
the extent that your product and service are protected under Intellectual Property Rights in the market that your
start-up is planning to enter. The second area to understand is the applicable laws of the country that you are
entering and those of your home country.

Tax and accounting

Tax and accounting is another significant challenge for entrepreneurs going global. These cover a whole range of
issues such as transfer pricing, duty drawback, foreign trade zones, and Value Added Tax (VAT) and tax incentives
for exporters. Again, these need to be looked at and it must be ensured that your company is meeting its tax
obligations in all the markets where the company operates as a business.

Unrealistic Expectations

Success does not come alone. It brings expectations with it. Most of the times, these expectations seem realistic,
But in the real sense of the word, are merely unrealistic. This same concept holds true for young startups.

Startups tend to face challenges when they set ‘unrealistic expectations’ following a booming success. Remember,
success is short-lived and expectations never end. This is where startups need to translate what the real
expectations are? Sustainability is the name of the game. And sustainability requires consistent efforts.

Financial Management

Money begets money. Remember the fact that when income increases, the expenditures also increase. There is no
doubt about it. One of the biggest challenges that startups face today relates to financial management.

It is a fact that small startups rely heavily on financial backups from the so called investors. At times, when there is
a cash influx, small firms, most importantly startups tend to find it really hard to properly manage their finances,
and they bog down against the pressure.

In order to address this kind of situation, startups need to play a safe and cautious hand, by keeping all the cards
close to their chests. Taking help from a reputed financial consultancy firm may really help out in managing
financial crises facing today’s startup businesses.

Winning Trust of Customers

Customer is the king. And that’s absolutely right. Winning a customer’s trust is one of the most important
challenges that businesses in general – and startups in particular – face today. With a highly satisfied and loyal
customer base, startups can scale and make progress towards excellence.

Customers are the real force behind a startup’s success. Their word-of-mouth power and their presence on social
media can give tech startups an edge against all the traditional businesses.

To win customers’ trust and loyalty, startups need to work aggressively to implement a customer-centric working
philosophy, so as to enable them to succeed in their pursuit of attaining the height sustainable growth and
progress they desire to achieve in this tech-savvy and challenging business world.
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