By Varinder Singh Jawanda, Founder at TrendyBharat.
(TrendyBharat is an online marketplace, home to a wide array of products sourced from 2000+ vendors across various categories.)
Not long ago, starting an e-commerce venture itself was considered as a big achievement for entrepreneurs, we have seen an overwhelming flow of such enterprises rushing to set news headlines ablaze.
However, these new startups are usually found lost in vaults or resting in boneyards within few weeks or months of their inception and with conviction, I must mention that it is not only the industry sentiments or abundance in supplies that accounts for their dumping. There are other impediments which handicap the progress of such enterprises which are basically small businesses to start with, and some of them I have noted below.
1: Dependence on Founders:
Businesses which are unable to operate without its founders are likely to expire early. Over indulgence of founders at operational level not only extends working hours of founders but it also results in complete or partial brain burnout which eventually leads to impulsive or brash decisions wherein founders are haunted by the thought that the business will stall in their absence and sometimes out of anxiety or concern founders end up taking abnormal decisions to abandon the business midway amid unfinished agendas.
2: How to maintain quality while scaling up:
Founders by and large are very vocal and emphatic about the quality of the services provided on their platform, more so during early days of the venture wherein number of transactions are fewer and always under observed monitoring.
Founders and key teammates are naturally upbeat about creating a distinctive and superior quality platform. However, as the business progresses or the need to scale up is felt stronger than before, one begins to see ignorance or compromise on maintaining quality norms because the founders are constrained to focus on survival and growth related parameters and get busy with it.
Naturally, the baton to carry the passion and fire of concept and offerings gets passed on to next in command and this is one stage where things begin to fall apart and maintaining a balance between growth and quality takes an inferior position.
3: Lack of financial resources:
Ideally speaking, this is a top reason for small organizations failing. When working with limited cash flow entrepreneurs usually fail to eliminate unnecessary expenses. They always tend to underestimate the amount of money needed to start up and sustain before the business begins to yield results or allure investors, an absence of contingency plan and inability to take accurate financial decisions also contributes towards early shutting of organizations and not to forget the diversions of funds for personal usage of founders. All in all, not being aware of money management is a sure way to fail.
4: Not so good advertising and marketing strategies:
Given the upsurge in search activity on the internet and related customers’ online demand, small organizations are failing to keep pace with related mechanisms and strategies. May it be SEM, SEO, WEBINARS or other social media tools, poor marketing initiatives often lead to products or services not reaching the targeted audience and hence remaining unrecognized.
Again it is easier said than done especially if we take into account the money spent by larger players to monopolize the internet world and having said the survival of fittest continues to haunt the small enterprises before all else.
5: Fatigue and weariness of Founders and founding team:
In the life cycle of an organization, there is always a time when founders or core team members fatigue-out, when the urge to succeed lessens or dies out, which is basically the burnout stage of the organization and drive to run the organization goes missing.
This is one stage which usually accounts for fall on KPI’S of the organization and it is by and large a silent killer of organizational prospects.
6: Underestimating the competition:
Marathas in India were a formidable force for almost 200 years until 1818, when Britishers introduced guns and cannons in warfare, one to one sword fight was a thing of past and Marathas failed to recognize the newest competition and overconfidence in their sword fighting abilities resulted in their elimination from Indian power struggle. Similar is the mindset of small enterprises wherein they blindfolded by their product or services wherein they fail to conceive or recognize growing threats from existing or upcoming competition, which often results in their extinction.
7: Under-performing employees:
It is a well-established fact that new startups require optimum performance from all possible resources in the organization, however people performing less well than expectation is a common sight and lack of clarity from top management, anxiety about future, distractions, no peer pressure, lack of domain expertise etc., are heavy hitters in contributing towards under-performing environment and ultimately it all leads to objective-less random movement which starts showing up in overall performance of the startup.
On the flip side of it, opportunities in India for small-scale businesses are enormous, it is just the matter of correction in approach on how to deal and /or harmonize with the respective challenges. In regard to skilled manpower and potential in business growth, Indian soil is incomparable.
It is just the matter of time when Investors and related ecosystems shall begin to chime with the larger picture on the canvas and collaborate well with founders to synthesize transformation of small businesses to next levels!