Technology is one sector that encourages investors and venture capitalists to pour millions of dollars into tech companies. More importantly, it motivates entrepreneurs to dip their toes in the tech industry. Starting a tech company in Australia has its fair share of challenges, which we will highlight in this article.
In this article, you will learn about five challenges Australian tech companies faces and how you can overcome them.
1. Financial Constraints
From securing funding to maintaining cash flow, from paying off business loans to becoming profitable, there are too many financial challenges that plague IT companies in Australia. The best way to avoid any financial issues is to start with a small investment and then take it from there instead of spending too much money early on. Instead of taking a business loan, it is highly recommended that you use your own money. Even if you need more cash to sustain your business, convince investors to secure funding on your own terms.
2. Hiring the Right People
Once you have secured the funds, the next step is to hire employees. That is where tech startups also go wrong. They end up hiring more people than they need, which puts more pressure on their finances. Top IT companies in Australia like Star Links know this and avoid it but others don’t. In fact, a majority of tech startup fail due to premature scaling. The best way to overcome this challenge is that you should hire slow and fire fast.
3. Strict Regulations
Deloitte’s report shows that Australian businesses pay a whopping $249 billion every year for compliance and poor productivity. Strict government regulations and compliance as well as controls and certifications all contribute to it. Complying with strict regulations and the astronomical costs attached to it can be a tough ask for a budding startup.
4. Cybersecurity Risks
The growing number of cybersecurity attacks and their increasing complexity is worrisome for most tech businesses and Australian tech startup are no exception. Since these businesses store and manage a lot of user data and also have a lot of sensitive information of their own, they are a lucrative target for cybercriminals. As a result, they have to take security measures to protect customer data from getting into the wrong hands. Invest in cybersecurity tools and arrange training programs to boost cybersecurity awareness of your employees.
5. Attracting New Customers
Competition in the tech industry is heating up as new startup continues to enter the tech space. This makes it tough for new startups to compete against established players who have been there and done that for many years. Attracting new customers is also a big challenge as most people prefer trusted companies. You will have to convince customers that your tech startup is delivering something they do not and is delivering better value for their money. It will take time, but you have to be patient.
Which is the biggest hurdle you have come across as a startup? Let us know in the comments section below.