Strength & Weakness of a Start-Up Company

A startup company is a bit like a newborn baby. On one hand, it is a clean slate of pure possibility with a brand-new history. On the other hand, it is weak because it isn't fully formed and has no real track record. As with a newborn baby, despite the sense of starting from scratch, a new business emerges from a unique history and set of circumstances that both limit it and give it potential.

TL;DR (Too Long; Didn't Read)

The strengths of a startup company are linked to its flexibility and creativity. The weaknesses of a startup business usually stem from inexperience.

Strengths of a Startup Company

  • Enthusiasm. An established business will never be able to rival the enthusiasm you put into filling your first order or satisfying your first account. As a startup business, you're ready to put your heart and soul into pleasing your customers because an order is more than just an order. It's an opportunity to show what you can do and to start building a track record that will serve you well for landing future orders.

  • Agility. While a large company is likely to be set in its ways, a starting business is still finding its way, so it is easier to adapt to market conditions and customer needs. You can make adjustments more quickly than a large company because you have less infrastructure. This adaptability positions you well to make innovations and seize opportunities.

  • Work environment. Despite the stress that can come with the unpredictability of working for a startup company, your team will have unrivaled opportunities to bond as you face challenges and hash out creative solutions. They'll have plenty of room to innovate and to see their efforts truly making a difference and setting a direction that can have lasting influence.

  • Informality. Unlike a large, established company that has protocols in place for everything from break time to email signatures, a startup is more likely to be informal and friendly. Bureaucracy is minimal, and employees don't need to jump through tedious hoops to set ideas in motion.

Weaknesses of a Startup Company

  • Lack of perspective. When you've been in business for many years, you've seen ideas and companies come and go, and you've made your share of mistakes. These experiences give you a yardstick to measure developments and opportunities. A startup company ventures into the unknown without valuable points of reference, and this can lead to missteps and false hopes.

  • Lack of capital. It's not uncommon for a startup to be underfunded, especially because it's difficult to access capital as a new business and equally difficult to predict just how much you'll need. Lack of capital can make it difficult to take advantage of opportunities that arise, and you also run the risk of running out of cash, making it difficult to purchase inventory and pay your staff.

  • Undeveloped network. Because you're just getting started, you may not have the contacts you need to source the right materials, make useful referrals or seek the right advice. This puts you at a disadvantage relative to established businesses with extensive networks in place.

  • Undeveloped processes. A startup company hasn't had time to develop smooth systems. This inexperience can lead to hiccups and inefficiencies that make your operation less competitive.

Leveraging Strengths

Because your startup business simply hasn't had the chance to stabilize cash flow, establish efficient processes and build a network, you'll need to compensate for these weaknesses by understanding your vulnerabilities and playing to your strengths.

Be transparent about what you can and cannot do effectively, both with your staff and with your clients. Take calculated risks and have backup plans for the occasions when things will inevitably go awry. Above all, be humble and learn from your mistakes.

References

About the Author

Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.