The First Few Years of a Startup
The startup ecosystem around the world is booming, and it is primarily because more and more people are growing interested in the field of entrepreneurship. However, not many of us have a clear understanding of it and like to pursue it just because it has become a fashion. Being a founder of a company is attributed to a high status, and your importance would automatically grow in the eyes of people as you embark on your new venture.
However, most people fail to put a promising forecast of their entrepreneurship journey. They work on startups, and most of them fail during the first few years. There are a lot of reasons why startups are meant to fail during the initial years of operations. In fact, the initial phase is the most crucial one because that is where the biggest challenge for business arises.
The challenge for every startup in the initial phase is about survival. No company can ever hope and expect to grow streams of revenue, expand or venture towards profitability during the initial years. It is extremely difficult for a startup. The biggest reason for it is that businesses struggle with finances and are usually operating on limited capital.
When a business sets up, it pays off a large number of fixed costs in a number of areas including technological infrastructure, raw materials, fixtures, and fittings, etc. These can reach a significant amount which would be needed to be paid beforehand. Even suppliers would not allow credit to a startup because it involves risks and usually banks and lending companies do not bet against the odds.
The biggest challenge is surviving through the day to day affairs of a business is the working capital. Working capital is immediate cash which can be used to meet the most recent expenses of a company. This could be almost anything which would be a part of running business operations on a daily basis. When startups make a lot of initial investments, they fail to secure working capital, and it may seem like a minute problem, but gradually, it turns into a major challenge which ultimately, drives a company out of business.
In this regard, many startups are joining hands with funding companies which help them meet their immediate liabilities and expenses with minor loans. Max Funding is a company based in Australia that specializes in offering loans to startups from as little as a few hundred dollars to over a million. Max Funding’s entire business model is based on facilitating small and medium-sized businesses that are on the verge of seizing operations just because they have run short of finances. The credit terms are also decent, which is why lending with Max Funding turns out to be a great decision in the longer run.
