4 Startup Hurdles: How to Make the Leap to Success

4 Startup Hurdles: How to Make the Leap to Success

You have created a great product or service, and you are ready to take the next step and reveal it to consumers. This period of transition from creator to entrepreneur, while exciting, is also filled with a lot of questions. The following are four common hurdles startups face, along with tips on how you can avoid them.

Business entity

At first glance, choosing the legal entity of your business may seem like a straightforward task. After all, there are only a few options available, right? Many founders consider the legal protections and tax brackets each entity offers, and then decide. However, it is important to realize that certain entity types will be more favorable for your business’ plans than others. Choosing the wrong entity could involve restrictions or requirements on how your business can operate. For example, C-corporations and S-corporations require that you treat yourself as an employee (even if you are the sole owner). Make sure you do your research to avoid delays in financing or loss of an investment, simplybecause your business was not setup properly for your industry.


As they say, it is all about location, location, location. Many founders jump in without thoroughly thinking about where they would have the best access to customers and suppliers. For some businesses, the most convenient location is working from home. The key is to remember that you cannot operate a business from just anywhere. You have to consider zoning issues; many localities control the number and type of businesses in their area through land zoning. Even home-based entrepreneurs can be subject to these commercial zoning rules and restrictions. To avoid delays or fines, make sure your business location is zoned properly.


One of the biggest challenges for a startup is competition. It is easy to make the mistake of trying to compete with established businesses and the success of their products/services. Instead of competing with them, focus on finding ways to enhance the products and services – or come up with a completely new idea. For example, rather than trying to do things “better and cheaper”, find ways to complement existing products. Above all, choose a niche market so you can differentiate your startup from competitors.

Rapid Growth

It might seem odd for a startup to worry about experiencing rapid growth. After all, isn’t agood thing when there is a high demand for your business’ products/services? While growth is the goal, it is possible for rapid growth to become detrimental. While your business is enjoying sales and profits, it could quickly lead to negative cash-flow. Without enough capital, your business will be unable to hire additional staff, purchase new equipment, cover payroll, increase inventory, pay for day-to-day expenses, etc. The best way to avoid a dangerous cash-flow situation is to have quick financing options on standby. For example, an alternative provider like First American Merchant specializes in providing new business funding solutions, allowing you to boost your business’ cash-flow in as little as 24 hours.

Slowing down the startup process long enough to prepare a thorough business plan will help you avoid missteps and delays down the road. When your business startup is thriving in the future, you will thank yourself for taking the extra time now.