Problems of Start-up Businesses in Initial Phases Research Project

This project assesses the challenges faced by start-up businesses during their initial phases. The research delves into various aspects, including the conceptual understanding of start-ups, identification of common problems such as poor marketing, financial constraints, competition, and inadequate planning. The project explores strategies to overcome these issues, emphasizing market research, effective marketing, financial planning, and building a strong initial team. The methodology includes a mixed research design, utilizing both qualitative and quantitative data from secondary sources like journal articles, academic publications, and online resources. The findings are analyzed using content data analysis, offering insights into the factors contributing to start-up failures and potential solutions. The research concludes with recommendations for further research and acknowledges limitations, providing a comprehensive overview of the start-up landscape and strategies for success. The project also includes a literature review, methods section, findings and analysis, discussions, and references. This project is available on Desklib, a platform providing study resources for students.

Running head: PROFESSIONAL PROJECT
To assess the problems of start-up businesses in the initial phases

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Table of Contents
Introduction.................................................................................................................................................3
Title.........................................................................................................................................................3
Research background...............................................................................................................................3
Problem statement...................................................................................................................................3
Aim and objectives..................................................................................................................................4
Research questions..................................................................................................................................4
Literature review.........................................................................................................................................4
Methods.......................................................................................................................................................8
Findings and analysis................................................................................................................................10
Discussions................................................................................................................................................13
Conclusion.................................................................................................................................................15
Recommendations for further research......................................................................................................15
Limitations................................................................................................................................................15
References.................................................................................................................................................16

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Introduction
Title
The title of this research is “To assess the problems of start-up businesses in the initial phases.”
Research background
An entrepreneur is a person who develops businesses, taking on financial uncertainities in terms
of attaining the profit. There are different start-up companies in the marketplace that have higher
growth. However, at the same time, there are different circumstances where a small company can
fail. The company is looking towards different factors for booming at the marketplace. However,
there have been inadequate resources in the company. The lack of understanding about startup
business is the main problem of business failure (Isaak, 2016).
This investigation has emphasized on factors and problems that could be reason of failure in the
startup business. There are adequate investigations on factor that can be reason of failing a
startup business. In this investigation, internal and external factors have discussed. This
investigation uses a secondary approach for gathering the data (Paoloni, &Dumay, 2015).
Problem statement
As per the survey, there are different investigations about failing the startup business. There is
4% of self-business related to startup business in Australia. However, 85% of these start-ups are
declining at the marketplace. This failure may generate an unfavourable result in relation to
wealth of nation. The GDP of a nation are declining because of these business failures. GDP of
Australia is declining, which indicates an unfavourable situation of entrepreneurship in the
nation. This issue is critically discussed in this investigation. This investigation is also
emphasized on the factor related to failure of startup business (Kolvereid, 2016).
Justification

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This research is beneficial for gaining the understanding regarding the start-up businesses in
initial phases. It is significant to comprehend the problems of start-up businesses in the initial
phases. It is effective for increasing the knowledge about the strategies for overcoming the
problems of start-up businesses in the initial phases.
Aim and objectives
The main aim of this research is to assess the problems of start-up businesses in the initial
phases. The given below are objectives of completing the investigation:
RO1: To explore the conceptual understanding regarding the start-up businesses in the initial
phases
RO2: To address the issues of start-up businesses in the initial phases
RO3: To recommend the strategies for overcoming the problems of start-up businesses in the
initial phases
Research questions
RQ1: What is conceptual understanding regarding the start-up businesses in the initial phases?
RQ2: What could be problems of start-up businesses in the initial phases?
RQ3: What are the strategies for overcoming the problems of start-up businesses in the initial
phases? Critical
Literature review
Conceptual understanding regarding the start-up businesses in the initial phases
According to Burns (2016), a start-up business is started by the entrepreneur as well as an
individual founder through scalable and repeatable business model. A start-up is a newly
emerged venture of business that key aim to build a feasible business model for resolving the

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marketplace problem as well as business requirement. A start-up is a corporation that is related to
initiation of its operation.
On the other hand, Reynolds (2016) evaluated that start-up companies are funded by
entrepreneurial founder because they contributes in capital for producing the products and
services for which they think there is high demand. Because of inadequate revenue as well as
high costs, company may face difficulty to sustain in the marketplace.
Problems of start-up businesses in the initial phases
According to Sánchez-Gordón& O’Connor (2016), poor marketing is the key problem of start-up
businesses in the initial phases. It is addressed that new business start-ups use radio commercials
and print advertisements without understanding the target market as well as without investigating
other information on the market. Thus, costs related to marketing as well as advertising could be
expensive. When a business cannot understand about target market then there could be chance of
misusing the capital on print advertising due to considering false messaging and wrong
appearance in a publication. It affects the business to arrive at the target market of company.
On the other side, Charter (2017) stated that managing work and home is another cause of start-
up the business. A start-up business has requirement of an incredible commitment of time as well
as strong determination. Further, financial distress could be faced by start-up business. In
addition, start-up owner has an issue to balance the vast demand of company as well as
requirement of family. When the stress within an organization is expanded then venture
capitalists may experience the difficulty at home.
As per the view of Spender CorvelloGrimaldi & Rippa (2017), poorly rated products as well as
services might be challenging with the big box stores; hence Startup Company may face the
issues in terms of creating pricing strategy like these stores. The international, as well as

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nationwide corporations produces the products at the lowest price due to producing high amount
of products as well as appreciate to supplier contracts. Pricing related to products as well as
services can delay in increasing the profit. The company can ensure the start-up will excels in
customer services rather than making the list of fair retail prices. The company should have
convenient hours as well as position.
In contrast to this,Lüdeke-Freund & Dembek (2017) evaluated that competition is another issue
of start-up businesses in the initial phases. There are high amount of small new businesses and
less amount of larger new business. Start-up business should understand their competitors and
assesses what the competitors are doing right. It would be beneficial for an entrepreneur to
expand their ideas as well as make them better. It may eliminate the potential pitfalls like
selecting niche market, eliminating rivalry, initiating a bad location and simply copying what the
rivalry is performing. The competition can beat by start-up business in case there is no market
for it and when the location does not create more demand for customers as well as when a startup
business cannot easily be copied.
According toDarchen (2016), poor planning is another cause of startup business that can be
managed by spending much time on it. The company should understand every aspect of the start-
up before flipping open sign. It involves the estimation of operating costs like rent, supplies, and
utilities, estimating finances and making the planning of initial marketing campaigns. A
comprehensive business planning is significant for business. But, in current times, circumstances
are changing so, there is a need to be flexible and creative enough for adapting.
Strategies for overcoming the problems of start-up businesses in the initial phases
Wei Wei & Western (2017) recommended that start-up business should investigate on the market
trend, economic growth as well as average revenues. It should also take consideration on voids in

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the marketplace and creates strategy for business to overcome these voids. It should also use
national, local as well as state resources like small business administration, personal mentors and
SCORE. Since, start-up business creates a business plan as well as the business model for
supporting and avoiding the revelation at the time of start-ups. In addition, it should address the
core operations of the business, staffing requirements, required inventories and equipment
requirements that aid to develop costs for each. Start-up business can use research findings in
order to build strength as well as an attainable marketing strategy for capturing the ideal
customers of a business, keeps customer base and target market.
In contrast to this, Bernstein Korteweg & Laws (2017) evaluated that the company should hire
well-qualified individuals for their initial team. It may also select people who can serve multiple
functions within an organization, particularly, in the first few months of business. It can also
avoid over-staffing of the company in order to lead many workforces with not enough
performance. It should also provide training to new hires to make sure the core operation of a
business and to smoothly run the business.
As per the opinion of Lessing &Brege (2015), start up business should get to know their
customers for overcoming the issue of a startup business in the initial phase. The company
should learn everything regarding their customers as it would be beneficial for selling the
products to their customers. The company can conduct the investigation on the customer base,
their preferences, and dislikes and likes in order to cater the homogeneous customers by using
the data collection method. It would be beneficial for making a strategic approach to get to know
their customers and create better positioning to develop products and services, develop
marketing messages, and reach and communicate directly to their customers.

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On the other side,Salamzadeh&KawamoritaKesim (2017) stated that the company can write the
business plan for overcoming the issue. When a company starts the business, it should
investigate, write and put together a business plan for reviewing the business idea as well as the
structure from different perspectives. These perspectives could be marketing, finance, and
operations. For obtaining finances for the business, the company should develop written as well
as formal business plan for demonstrating the investors and lenders. The company can assemble
the business plan to start-up the strategy that details a vision for the corporation and with which,
it can guide the business even if it does not need to apply for financing.
Methods
Research design
In this investigation, an investigator has used a mixed research design method as it contains the
characteristics of both qualitative and quantitative research design. The qualitative research
design is beneficial for capturing the theoretical information regarding research issues. It is
collected by different sources such as journal articles, academic publication ,and online websites.
And, quantitative research design is used to obtain the numeric information regarding research
concern. It is gathered by using statistics charts and graphs (Boons, Chertow, Park, Spekkink, &
Shi, 2017).
Research strategy
In this research, both articles and literature review strategy would be used to gather the
secondary information regarding research issues. In this investigation, 3 articles are selected
related to research objectives as it is beneficial for gaining the depth understanding regarding
problems of start-up businesses in the initial phases. These articles are selected by online
websites as it creates authentic outcomes. Furthermore, the literature review is another strategy

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for gathering the secondary information regarding research issues. For this, different journal
articles, academic publications, and online websites are used. This strategy is used to support the
article’s facts and figures as it generates authentic outcomes (Hyytinen, Pajarinen, &Rouvinen,
2015).
Data collection methods
In this research, only secondary data collection method is used to gather the information
regarding research issues. These data are gathered by different sources such as journal articles,
academic publication, textbooks and online articles (Kranz, 2016).
Sampling
In this research, a non-probability sampling method is selected to select the sample in a
systematic manner. In this technique, the convenience sampling method is used for selecting the
articles as per the convenience. In such manner, 3 articles are selected as a sample size for
collecting the data regarding problems of start-up businesses in the initial phases (Powell, 2017).
Data analysis
In this research, content data analysis technique is used to assess the pooled secondary data
regarding the problems of start-up businesses in the initial phases. This technique is beneficial
for gaining theoretical understanding with respect to research issue.
Ethical consideration
In this research, research has used own words to avoid the copyright concern and attain the
investigation in an ethical way. Furthermore, an investigator has provided an in-text citation in
each paragraph for creating the validity and reliability of the research study (Cremades, 2018).
Findings and analysis
Article 1: The Top 20 Reasons Startups Fail

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(Sources:CB insight, 2018).
It is analyzed that there are the different reason for failing an entrepreneur. These reasons could
be a failure to pivot, did not use the network, disharmony among team, pricing issue, and ran out
of cash and no market needs. An entrepreneur can fail as they cannot disconnect friends from
enemies. They cannot address EIQ from down. It is also identified that start-up business can face
difficulty in terms of addressing part-time accountants and they have no initiative regarding how

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to analyze the skills and experience of legal advice (Andriole, 2018).It is addressed that startup
business could be failed in case they unable to address smart loyal employees and co-founders
who can optimize their contribution. Startup business can fail as they cannot separate dumb
angel shareholders from efficient ones. There are a high amount of entrepreneurs who do not
know regarding the competitors (For entrepreneurs, 2018).
Startups in Australia - Statistics & Facts
Percentage related to population in developing new business
(Sources: Statista, 2018).
The above statistic indicates the emerging startup rate in Asia in the year 2018. The emerging
startup business shows the percentage of the population who are emerging entrepreneur at
present such as actively engaged in developing business. This business cannot pay higher
compensation, salaries as well as other payments to possessor for over three months (Statista,
2018).
Article 2: Here are Australia’s 24 most active startup accelerators and incubators
The given chart shows the list of most active incubators and accelerators in Australia:

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(Sources:Powell, 2017).
The above chart indicates that there isa number of accelerators and incubators in Australia who
has disproved over the last few years. In addition, Artesian who is Sydney-based venturalist
revealed the level of activity in the certain region of Australia. Artesian has demonstrated
publicly available information regarding the number of start-ups that have passed these
accelerators since their opening (Kranz, 2016).
It is found that on the top of the list, there are two accelerators such as Slingshot and BlueChilli.
It is addressed that Slingshot has processed over 118 startups since their initiation and BlueChilli
has processed 103 startups. There are also certain names that are in a list of accelerators and
incubators in Australia like Startmate, TechStars, SproutXt,and Runway Geelong (Hyytinen,
Pajarinen, &Rouvinen, 2015).
Article 3: The Five Stages of Small Business Growth