While startups may be modest in size, they have the potential to cause economic ripples with favorable impacts on people’s lifestyles. A startup refers to a young company that has just started its first operations, with the goal of bringing unique goods or services to the market for which they think demand is needed.
Startups are extremely valuable sources of innovation and civilizational growth from an economic standpoint. By attracting new sector investors, creating new employment, establishing new markets, and assisting in the rise of goods and services production, their formation and development help provide the groundwork for a more dynamic local development.
Many believe that startups have a negligible impact on the economy due to being rather high-risk with high rates of failure, which creates constant unpredictability within the markets. However, this is not true; these companies can prospectively impact the economy positively through innovation.
In reports from 2017 created by the Center for Economic Studies at the US Census Bureau, they have found startups disproportionately have higher technology, allowing for increased productivity. In addition, startups create “new markets or completely transform old markets by introducing products that change the world.” With advancements in technology and more items, startups then make competition and disrupt the economy to evolve.
Not only are startups able to create more goods, but they can help grow the employment rate. According to data from the International Economic Development Council, startups have been responsible for 10% job growth worldwide since 2017, growing the economy with jobs and opportunities. It has been proven that there would be no net job growth in the US economy without startups.
In another 2017 report written by the Progressive Policy Institute, “private-sector job growth is significantly higher where the startup activity is high. In contrast, regions with little startup activity experience less than half the job growth.”
- How do Startups Contribute to the Economy?
- How are Startups Contributing to Indian Economy?
- What are the Benefits of a Startup?
- Why is Startup Management Important to Country’s Economy?
- What are the Benefits of Startup India?
- How can you Find the Right Startup for you?
- What are the Pros and Cons of Startups?
How do Startups Contribute to the Economy?
When it comes to startups, a general perception is that it needs to be in a developed country where all the resources are available. In truth, that misses the point: startups can begin anywhere, and it’s often the countries with the greatest needs that present the biggest opportunities.
Read Also: Why Franchising is a Smart Business Solution
Startups are at home in underdeveloped countries, nations in conflict, and those countries new to entrepreneurship. Each of these environments offer untapped problems which startups can take advantage of not just to make a profit, but also to make an impact.
Here are some examples of how startups make economic contributions.
startups provide their neighbors with more than just jobs. By collaborating with smaller businesses like wholesalers and accountants, they may also increase regional creativity and productivity while more well-known enterprises construct their infrastructure.
When there is a chance to make their ideas a reality, people take action. If there was no means to make money off of their idea or if they couldn’t see how, it would help others, why would they pursue it? Starting a small business provides original ideas to the entire society, not just a local community.
2. Larger firms receive support:
Small businesses’ distinctive contribution to the overall economy comes from acting as hubs for huge organizations. For instance, big businesses have to ship their products all over the world. A smaller company may find it advantageous to store its goods in one state while generating the raw materials. Large firms have made investments in the area, increasing the number of job prospects in the town. The best course of action is to help local residents establish and expand new businesses and firms.
3. Creating jobs:
Creating jobs is one strategy. Although it might seem obvious, this is important. Startups and other young enterprises offer the most employment opportunities; they create nearly half of all new jobs. It is essential for businesses to grow in the right legislative environment. The growth of startups consequently accelerates with time.
4. Possibilities for people:
Small businesses let people be their own bosses whereas CEOs of underrepresented minorities in large firms are changing. This allows people to earn money on their terms rather than having to worry about job interviews, resumes, or cover letters.
As more people create their own businesses, others may follow those who do so. Smaller towns gain a lot from the idea of offering opportunities. If there aren’t enough businesses in a certain location, how can people find work? People can create their own.
5. Effect on Growth and Productivity:
High rise in output Businesses is disproportionately youthful and make a disproportionate contribution to rising output and productivity. Technological progress has long been acknowledged by economists as a significant factor in productivity. High-potential startups are disproportionately more developed, which increases productivity.
Local economies particularly benefit from the operations of local business owners. For instance, concentrating on the local market in service and marketing activities may give startups a competitive edge. Business benefits include more jobs and discretionary spending in the area, more tax revenue for local governments, and a committed customer base for the company.
As a result, startups, especially high-potential startups, account for the majority of net employment creation, have much greater growth rates than other businesses and have a considerable impact on our economy’s overall productivity. The effect of startups on our economy is, therefore “big little.”
How are Startups Contributing to Indian Economy?
Multinational corporations had a significant part in the expansion of the Indian economy through Globalization. Now, the recent trend of founding startups in India has transformed the economy by increasing GDP and revenue.
Startups in India have blossomed, and they are having an influence on the economy. Registration for new businesses has surpassed 1.43 million due to rising demographics and favorable surroundings such as an open and commercial culture. Because India has the youngest population, with an average age of 28, Indian entrepreneurs are among the world’s youngest.
Inception of growth
With the imminent rise in Indian startups, new markets and opportunities have been created, alongside disrupting the established business models in the Indian market. In 2022, 14 out of the present Indian startups have made to the list of unicorn startups that show tremendous growth.
The startup movement is bringing revolutionary change in the Indian market. Some startups promote creative customized solutions for clients, while others use technology such as AI (Artificial Intelligence), IoT (Internet of Things), and ML (Machine Learning) to improve customer experiences.
Another subset of businesses (Edtech startups) enhances the learning experience by making skill-learning simple through the use of novel technology. Indian startups have a rapid influence on India’s economic situation.
Ed-tech startups kickstart the digital disruption
Education and skills are crucial components of our country’s success in this fast-paced transitional period. Reimagining skills via education is the essential principle for benefiting not just economic development but also economic equality.
What is altering our environment when it comes to skilling and education? The factors driving the transition of learning, skilling, and educating include digital disruption and the entry of ed-tech and skill-tech businesses into the market.
The education technology sector has evolved, and many of them are impacted by creative learning solutions given by cutting-edge technologies. The majority of them have evolved into Skill-tech startups, with a greater emphasis on skilling, reskilling, and upskilling.
Skill-tech startups have advanced the quality of education by concentrating on skills and utilizing modern-day technology, whether it be dancing, coding, painting, or language acquisition.
Skill-tech businesses have begun to contribute to the Indian economy by creating more employment, rising GDP, and training people to get skilled and upskilled for the impending Fourth Industrial Revolution.
The skill-tech startups have offered personalized assessments, immersion, community sense, skill development, networking, AI-enabled learning experience and real-time scenario engagement.
Obstacles in the way of India’s skill-tech startups
Regardless of the strength of Indian startups, 90 percent of them collapse during their first five years in the market. According to a survey of 77 percent of venture funders, many Indian skill-tech businesses lack groundbreaking innovation based on new-age technology or a distinctive business strategy.
Considering India’s vast market size and vigorous entrepreneurial activity, Indian startups account for just 4% of internationally known Unicorns.
Another question to address is that venture capitalists have indicated that businesses fail because they are unable to select the right people with the proper skills.
Digital empowerment accelerating transformation
Adapting technology in every aspect of life is vital in this era and we all understand. From digital payments to ordering food, from learning dance online to ordering bulk customized gifts, digitization has proved to be the god of all ease. The same digital empowerment has paved a way for a transformation.
An integrated digital ecosystem is ideal for driving transformation because it provides all of the available tools, the necessary skills, and data collecting for maximum empowerment.
Challenges and road ahead
The future of Skill-tech businesses is bright, but not without hurdles. The policies of the government are continually being improved and simplified.
Startups are dramatically altering the lives of ordinary people. The combination of technology and integrated solutions provides more with a single click.
More startups mean more automation, which will increase consumer and user behavior to acquire anything, anywhere, and at any time. Skill-tech firms will feed the need of consumers to become competent with a single click using the same technique.
The biggest challenge we may have in the future is that people will seek quick answers or quick skill acquisition. Currently, the majority of skill learning is emphasizing abilities that are vital and relevant to today’s industry. We should shift course here and find a better answer. Mental, social, and physical well-being abilities are all equally vital in and for society. Since the Work-from-Home trend began, it has inspired individuals to work in addition to working on their creative side.
What are the Benefits of a Startup?
Since a startup is less developed than a large corporation, working for one can be overwhelming. In spite of this, there are many personal and professional benefits to working for a startup. Below are 15 benefits you can expect when working at a startup.
1. Accelerate your career
Given that startups are still in the early stages of development, you can expect the company to grow quickly. As a result, you’ll see a significant advancement in your career.
When you work for a startup, you have more opportunities to advance inside the company than if you worked for a large corporation. If you decide to change jobs in the future, the title you have earned during your time at a startup will allow your resume to stand out to potential employers.
2. Gain responsibility
Because a startup has so few employees, your position will be extremely important to the success of the company. The company may not have anyone else who has your specific skills or experiences, so expect to have a lot of responsibilities very early on, like the chance to be the first point of contact for your clients or partners. Gaining such a vast amount of responsibility can be great for both professional and personal growth.
3. Plenty of learning opportunities
Because startups have a small employee base, you’ll have plenty of opportunities to learn about the company and how it operates. While you will be hired for a specific skill set, you will be learning a lot about the position on the job. Another feature of working at a startup is gap filling, in which you will be expected to complete tasks that are similar to but not necessarily included in your position. For example, if you were hired as an editor, you might also be expected to do graphic design on your work as well.
4. Not tied to one job description
For a lot of people, doing the same tasks every day can become dull. However, working for a startup will keep you on your toes, as you aren’t tied to one job description.
During your time working for a startup, you will work on a variety of tasks, including some completely outside your range of skills. This is especially great if you’re a young professional still unsure of your current career path, as it gives you the freedom to discover which components of your position you prefer.
5. Flexible work environment
Startups are known for having a more relaxed office space than established businesses. With an informal dress code and flexible remote policies, startups give their employees the freedom to work in the best environment for their lifestyle. Many startups also provide additional perks such as snacks and meals, employee rest areas, or games and activities.
6. Show your creativity
A successful startup is built on the foundations of creativity and innovation. While meeting deadlines and completing goals is vital for any business, when working for a startup you will not be tied down by processes and procedures like you would be in a bigger company.
This is because the founders of a startup are focused on preserving the ideas and perspectives of their employees in order to promote company progress. In a startup, you can expect to participate in brainstorming sessions, share your ideas, and frequently collaborate with coworkers.
7. Embrace trial and error mindset
Startups thrive on innovation. However, not every new idea is destined to be a success. Understanding when you’ve made a mistake and accepting feedback is essential in any job, but it is especially important when working for a startup, as your decisions can have a fundamental impact on the growth of the company and their actions moving forward.
Feedback promotes not only healthy collaboration among coworkers but also clear and comfortable communication. Furthermore, learning from your mistakes is the most effective way to improve your skills and advance as a professional.
8. Learn frugal solutions
Startups are often on a tight budget since they lack the same level of investment as bigger companies. But don’t panic; this can lead to some creative workarounds and cost-saving solutions. You may even enjoy working on a tighter budget as it pushes you to be more imaginative with the resources you have. A reduced budget also allows you to see exactly where your money is best spent and where you can cut corners.
9. Hard work is noticed
Another advantage of working for a startup is that your performance is important not only to your position but also to the company’s overall success. This paired with the finite number of employees means all of your hard work and effort will have a genuine chance to shine at a startup.
10. Build stronger relationships
Making connections with new coworkers can be stressful for anyone. However, one of the best aspects of working at a startup is that because you work in such a small group, building relationships is much easier than at a bigger company.
Because a startup has fewer employees, you will get the chance to actually get face time with the founders and work closely with the other members of the company. This closeness not only helps to maintain a positive work environment, but it also allows you to form strong bonds with your coworkers and other employees in the larger startup community. This will contribute to your sense of belonging and loyalty to the company.
11. Earn the trust of the founders
Internal trust is critical for most startups, whose founders rely on their employees to treat the company as if it were their own. You will not only earn the trust of your coworkers, which can lead to a more harmonious workplace, great communication among coworkers, and opportunities later in your career, but you will also demonstrate your dedication to the company by being a trustworthy employee. It can also help you build solid bonds with the people who make up the small team of a startup.
12. Stock options may be available
While working for a startup has many perks, the pay is not always one of them. Because startups have limited funds, many of them will offer equity as an incentive to join their team. While equity shouldn’t be a replacement for a fair salary, it has the potential to pay off in the future as the company grows.
13. More leadership opportunities
In contrast to bigger companies, climbing the corporate ladder can happen quickly at a startup. Because startups have fewer employees, there are more opportunities for you to demonstrate your abilities and advance through the ranks. And, while a higher title isn’t everything, it can be used to help score your next position, along with your diverse skills.
14. Be part of a team
Working for a startup means knowing that your work, efforts, and ideas, as well as those of your coworkers, are directly contributing to the company’s success. This means that as your company grows and achieves significant milestones, you can all feel a sense of ownership and pride. Furthermore, because everyone is working together to help the company grow, it fosters a team mentality.
15. Have a career that inspires you
Working for a startup can be one of the most inspiring experiences you can have in your career. Not only will you be helping a business grow from the beginning, but working for a startup gives you the opportunity to be a part of a product or service that meets a unique need. Working for a startup may even inspire you to create your own innovation and launch your own company.
Why is Startup Management Important to Country’s Economy?
Startups are small companies but they play a big role in the economic process. They create more jobs which insinuate more employment, and more employment means an improved economy. Not only that, a start-up contributes to economic development by increasing innovation and inducing competition. New entrepreneurs come up with new ideas, much needed for constant innovation and to generate competition.
1. Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest their own resources and attract capital (in the form of debt, equity, etc.) from investors, lenders and the public. This mobilizes public wealth and allows people to benefit from the success of entrepreneurs and growing businesses. This kind of pooled capital that results in wealth creation and distribution is one of the basic imperatives and goals of economic development.
2. Create Jobs: Entrepreneurs are by nature and definition job creators, as opposed to job seekers. The simple translation is that when you become an entrepreneur, there is one less job seeker in the economy, and then you provide employment for multiple other job seekers. This kind of job creation by new and existing businesses is again is one of the basic goals of economic development. This is why the Govt. of India has launched initiatives such as StartupIndia to promote and support new startups, and also others like the Make in India initiative to attract foreign companies and their FDI into the Indian economy. All this in turn creates a lot of job opportunities and is helping in augmenting our standards to a global level.
3. Balanced Regional Development: Entrepreneurs setting up new businesses and industrial units help with regional development by locating in less developed and backward areas. The growth of industries and businesses in these areas leads to infrastructure improvements like better roads and rail links, airports, stable electricity and water supply, schools, hospitals, shopping malls and other public and private services that would not otherwise be available.
Every new business that locates in a less developed area will create both direct and indirect jobs, helping lift regional economies in many different ways. The combined spending by all the new employees of the new businesses and the supporting jobs in other businesses adds to the local and regional economic output. Both central and state governments promote this kind of regional development by providing registered MSME businesses various benefits and concessions.
4. GDP and Per Capita Income: India’s MSME sector, comprised of 36 million units that provide employment for more than 80 million people, now accounts for over 37% of the country’s GDP. Each new addition to these 36 million units makes use of even more resources like land, labor and capital to develop products and services that add to the national income, national product and per capita income of the country. This growth in GDP and per capita income is again one of the essential goals of economic development.
5. Standard of Living: Increase in the standard of living of people in a community is yet another key goal of economic development. Entrepreneurs again play a key role in increasing the standard of living in a community. They do this not just by creating jobs, but also by developing and adopting innovations that lead to improvements in the quality of life of their employees, customers, and other stakeholders in the community. For example, automation that reduces production costs and enables faster production will make a business unit more productive, while also providing its customers with the same goods at lower prices.
6. Exports: Any growing business will eventually want to get started with exports to expand their business to foreign markets. This is an important ingredient of economic development since it provides access to bigger markets, and leads to currency inflows and access to the latest cutting-edge technologies and processes being used in more developed foreign markets. Another key benefit is that this expansion leads to more stable business revenue during economic downturns in the local economy.
7. Community Development: Economic development doesn’t always translate into community development. Community development requires infrastructure for education and training, healthcare, and other public services. For example, you need highly educated and skilled workers in a community to attract new businesses. If there are educational institutions, technical training schools and internship opportunities, that will help build the pool of educated and skilled workers.
A good example of how this kind of community development can be promoted is Azim Hashim Premji, Chairman of Wipro Limited, who donated Rs. 27,514 crores for promoting education through the Azim Premji Foundation. This foundation works with more than 350,000 schools in eight states across India.
So, there is a very important role for entrepreneurs to spark economic development by starting new businesses, creating jobs, and contributing to the improvement in various key goals such as GDP, exports, the standard of living, skills development and community development.
What are the Benefits of Startup India?
Starting a business is challenging as it is, so it’s always better to take all the help that comes in the way. That is what the Startup India initiative is all about – helping entrepreneurs.
Getting your startup registered with Startup India has a host of advantages.
1. Relaxed norms
All the startups that get recognized by DPIIT can get listed as sellers on the Government e-Marketplace, which is the Government of India’s largest e-procurement portal. The government of India has authorized its ministries, departments, and public sector undertakings to relax norms in all public procurements for startups that are recognized by DPIIT.
As a DPIIT-authorised startup, your company can apply for government tenders without having to show prior proof of work or have a minimum yearly turnover.
2. Tax exemption
As a registered startup with Startup India and DPIIT, your startup is eligible to get a tax exemption for 80-IAC of the Income Tax Act. Once you get the green signal from the income tax authorities, your startup can avail of tax holiday for three consecutive years.
In addition to the above, recognized startups can also apply for exemption from angel tax under Section 56 of the Income Tax Act.
Until May this year, 448 startups have been granted tax exemption under section 80-IAC and close to 6,000 cases for tax exemption for angel tax have been filed.
3. Access to funding
There are two different types of funds that Startup India has for startups that register with DPIIT.
As a part of Startup India, your company can raise money from the Fund of Fund For Startups (FFS) which has a corpus of a whopping Rs 10,000 crore. FFS, which is managed by SIDBI, gets in the hands of VC firms that are registered with SEBI, which in turn invest in startups. About 600 startups have collectively raised Rs 9,571 crore through this fund of funds till May 2022.
Another fund of funds under Startup India is for companies looking for seed round of investment. Formally known as Startup India Seed Fund Scheme (SISFS), this fund is set up to help companies at their initial stages such as finding proof of concept, prototype development, product trials, market-entry, and commercialization.
Through SISFS, Startup India aims to disburse money to 3,600 startups through 300 incubators across India.
4. Easy exit
It’s a well-known fact that most startups fail to take off and unfortunately have to shut down. Ironically, it’s more difficult to shut a company than to start it.
However, if your startup is recognized by DPIIT and you need to take an exit, it’s quite a simple process. A startup can shut down its business within 90 days from the date of application.
5. Cheaper patent costs
The cost of filing for patents and trademarks can be quite steep. In addition to the cost involved, it takes a really long time for the patent and trademark certificates to come by. The good news for startups recognized with DPIIT is that they can process their patents and other intellectual property rights services at a considerably lower fee.
Startup India will provide your company with an 80% rebate to file patents. In case of filing for trademark certification, you will receive a 50% rebate, decreasing the cost from Rs 10,000 to Rs 5,000. Your application process will be fast-tracked and processed within 72 hours.
How can you Find the Right Startup for you?
Ultimately working for a startup can be extremely beneficial for your long-term career. With that said, working at a startup is not for everyone and there are many questions you should ask yourself before applying. If you’re on the fence about working for a startup, follow these steps to find the best work environment for you.
Research the company
Thoroughly researching a startup is a great way to find out its history, long-term goals, and business practices. Researching the company can also provide you with specific information regarding the position and previous employee reviews. This information can be valuable when determining if a startup is the right fit for you. You can usually find information about the company on its website or job sites.
Be sure their values align with yours
According to Forbes, workplace synergy is at its best when your personal values align with the company’s values — and nowhere is this more obvious than in a startup. Because startups are founded on the ideals of their founders, your ability to connect with their values will be critical to your ability to help the company grow. Aligning your values also makes developing and achieving your personal and professional goals easier.
Determine if the company’s culture is right for you
While working for a startup can be a fun experience, they are not for everyone. Employees working for a startup often need to be more flexible and creative than those in a bigger company. Self-starters who know how to take charge work best in the startup environment.
Many startups offer flexible working hours and the ability to work from home, so they are perfect for those who prefer a nontraditional schedule. Unlike corporate executives, a lot of startup owners may be less concerned with tracking hours as long as you meet your obligations.
There are several ways to find out if the startup you’re interested in provides these types of benefits. You can contact both past and current employees to ask them about their experiences at the company and whether the information promoted by the company is accurate. You can also look through company review websites to see what other applicants have to say about the startup and its work environment.
Understand the time required
Working for a startup will require more of your time than working for a larger company. While employees are vital to every business, they are especially so for a startup. Since employees of a startup are helping to build the company from the ground up they will have to dedicate a substantially greater amount of their time to the company.
However, people are less likely to be motivated if they are overworked. So it’s critical when working for a startup to set boundaries and promote a healthy work-life balance, whether through establishing mandatory breaks or providing employees workshops on stress relief. To get a clear picture of how much of your time will be required, don’t be afraid to ask specific questions about breaks, vacation time, or mental health initiatives.
The best way to learn about a startup is to apply. This increases the likelihood that you’ll get some time to talk to the company’s leadership about the company and their expectations for the position. This can also help you determine if working for a startup is the right fit for you.
Many startups are hiring remotely for the new year as a result of COVID-19. Whether you’re looking to start a career in software engineering or resign from your current job to pursue a new industry, joining a startup is a great career move for anyone looking for a flexible work environment with a wealth of opportunity.
What are the Pros and Cons of Startups?
When you imagine working at a startup, you might envision an office full of ping-pong tables and an endless supply of cold brew and kombucha. Working at a startup can have a lot of advantages, from opportunities for growth and innovation to stock options.
However, working at a startup can also come with disadvantages, like long hours, low pay and a lack of job security. If you are considering taking a job at a startup, or even founding your own startup, it’s worth thinking through the pros and cons of startup culture.
There are several pros to working for a startup, especially for those who are new to the professional world such as recent graduates or young professionals. Choosing to work at a startup can offer several benefits, including:
- More opportunities to learn
Many startups will give their employees a lot more responsibility than more established companies. This is because startups often can’t afford to hire several employees who each have a different responsibility within a department. Startups often hire their employees based on a certain skill set each employee possesses, but often end up giving each employee a larger role within the organization to compensate for the lack of employees as a whole.
This can be a big benefit, especially for new professionals, because it offers ample opportunity to learn things that you probably wouldn’t be exposed to in a corporate or more established organization. Additionally, because the founders and employees of startups often work together, you’ll have direct access to the people behind the startup and will be able to learn from them every step of the way.
- Flexible hours
Many startups offer employees the opportunity to work flexible hours, and some startups even allow employees to work from home if they choose. This is a great perk for professionals with an active home life or with regular responsibilities outside of work.
- Unique experience
Working for a startup is often unlike working for any other type of company. Because of this, employees of startups often get to enjoy a unique experience that isn’t available elsewhere. For example, some startups offer nap pods or a nap room where employees can take a quick nap at work, while other startups may provide daily catered lunches to employees.
Startups often provide their employees with several benefits to keep their employees satisfied and ensure work satisfaction is at its peak. Common benefits offered by startups include:
- Free drinks and food at work
- Free gym memberships
- Discounts on services or goods offered by the startup
- A casual environment in which to work
- Flexible hours and work-from-home options
- Unlimited paid-time-off (PTO)
- Pet-friendly workspaces
- Shorter work weeks
- Increased job satisfaction
Employees who work at startups often experience more job satisfaction because they are typically more involved in the growth and evolution of the company. Knowing that you are actively contributing to the success of a company is a great feeling and can significantly impact a person’s overall satisfaction with their work. Also, because startups often have significantly fewer employees than other companies, the founders and leaders of the startup tend to put more effort into ensuring employees are happy at work.
- Minimal supervision
Another great perk of working at a startup is the often minimal supervision that employees work under. Because there are often few employees who work at the startup, supervision is more difficult to spread across each department. This means that employees are often allowed to make their own decisions within their professional roles and have the opportunity to contribute to the progress of the startup.
- Opportunities for innovation
Employees who work at startups are often given ample opportunity to show off their knowledge and skills in a way that contributes to the development and success of the startup. Whereas more established and corporate organizations tend to have a chain of command in which ideas must flow through, employees can take their ideas directly to the top at a startup. This is especially beneficial for more creative individuals who regularly come up with exciting innovations they want to share with their team.
While there are several benefits of working for a startup, there are also potential disadvantages you should be aware of when determining if this career path is right for you. Potential cons of working for a startup include:
- Unsure job security
According to data from the Bureau of Labor Statistics, only 50% of startups with employees make it past the first five years of business. Tech startups are particularly susceptible to this as the threat of technological advancements and new and improved innovations can put them out of business.
For these reasons, working at a startup often does not guarantee job stability or security. For example, some employees work with a startup that’s only in business for three years, and after that period of time, they have to find other work due to the startup shutting down.
- A heavy workload
Working for a startup usually comes with more responsibility than in a more established company. For some, this is a benefit. For others, this can cause work-related stress due to the heavy workload and responsibility placed on them. Burnout and stress are more common in startups that give their employees significant responsibility and responsibility that goes beyond their skill set.
Many startup employees are required to work long hours with limited vacations and holidays. This is especially true in the early days of the startup, as these new companies must quickly capitalize on trends to experience early growth. While the work schedule is often flexible, startup employees will still often be required to work longer hours than what’s required at a typical 9 a.m. to 5 p.m. position.
- Less pay
Many startups are unable to pay their employees what they’re actually worth until the startup begins to see significant growth and an increase in revenue. As a result, working for a startup often means less pay than what you’d make at a more established company.
- Lack of structure
Startups often lack structure as the leaders and founders tend to blend in with the employees. Rather than having a clear hierarchy of power and influence as with more established and corporate organizations, it’s easy to get confused as to who is overseeing what in a startup company. This can sometimes leave employees feeling unsure of who they should go to regarding a particular issue and can result in workplace confusion and uncertainty.
- Constant change
Change is often constant in startups. From heading in an entirely different direction on a project to switching up the roles of employees with little notice, the titles, responsibilities and roles of startup employees are regularly changing. This can be a disadvantage for professionals who prefer a more stable and predictable work life.
- Limited resources
Resources for professional development are often limited among newer startups and may not start being available until the startup is more established and bringing in ample revenue.
- Too much freedom
While ample freedom is great and even preferred by some professionals, too much freedom can be a disadvantage for others. Startups often provide significant freedom to their employees and expect them to thrive under these conditions. However, if you’d prefer to focus on only one skill or task, the amount of freedom offered by a startup may not be a good fit for you.