This post originally appeared on the Louisiana Technology Park blog.
Starting a business is exciting — and fraught with challenges. Many of them are fairly common, however, and knowing what you’re up against will help nurture your startup through those heady early years.
“There are a lot of things that can be overcome with drive,” says Joshua Loeske, CEO at Quality Sitework Materials and an accelerator coach at the Entrepreneurs’ Organization advisory network. “Business is not a straight line from the bottom to the top; we all go through peaks and valleys.”
Here are five big problems to look out for in your startup’s first three years.
Money management is vital to small-business success, but entrepreneurs often fail to do it correctly, Loeske says. “Small businesses don’t estimate the appropriate runway for takeoff,” he says. “If you haven’t appropriated the proper amount of cash, you end up losing really quickly.”
Early success doesn’t protect against cash issues either, he says. “A lot of small-business owners try to bootstrap, and that’s a viable method to start,” he says. Working with what you have doesn’t allow for rapid growth, however, and cash can become an issue very quickly if your company hits it big early on. Work with someone who can help you forecast your financials to avoid these problems.