Strength & Weakness of a Start-Up Company

by Luke Arthur; Updated September 26, 2017

When starting a new business, it sometimes helps to look at the potential strengths and weaknesses of the company. Even though most start-ups tend to be smaller at first, this does provide them with some benefits that larger businesses do not enjoy. At the same time, start-up businesses have a few weaknesses of their own to deal with.

Flexibility

One of the most notable advantages of a start-up business is that it is completely flexible. Before the business gets too large, the business owner still has the ability to adapt the infrastructure to meet the needs of the marketplace. After a bit of testing in the market, the business can alter some of its practices to be more efficient. Big businesses often find themselves becoming obsolete because they are unable to change with the needs of the market.

Talented People

Another advantage that most start-ups have is the quality of talent that they have working for them. During the early stages of a start-up business, the founders of the company will be working on many different tasks. These individuals are often much more qualified than what they are currently doing to get the business off the ground. Even though the business is using this strategy so that it can save money on overhead, it also works to the business's advantage by resulting in higher-quality work.

Lack of Capital

Even though start-up businesses have flexibility, they often do not have the necessary capital to expand. New small businesses may not have enough money to advertise as they should, and this could negatively impact sales. The lack of capital often keeps a business from bringing on additional employees and securing additional facilities. This can keep the business smaller much longer than the owners of the business would have hoped. Attracting additional resources can often be a necessary step for a new business to turn the corner.

Responsibility

Another potential weakness of start-up companies is that too much responsibility is placed on a single individual. Many times, the owners of s start-up business rely on each other to do practically everything for the company. When someone is not up to the task, it can significantly impact the success of the business. In larger businesses, everything is compartmentalized so that one person performing poorly will not hurt the business as a whole.

About the Author

Luke Arthur has been writing professionally since 2004 on a number of different subjects. In addition to writing informative articles, he published a book, "Modern Day Parables," in 2008. Arthur holds a Bachelor of Science in business from Missouri State University.