Here is a fact that might shock you- 9 out of 10 startups fail. This is not to dishearten you or deter you from following your passion but rather shed light on the gravity of the endeavor. If you think that launching a startup is tough, then try sustaining it for years as you are bombarded with challenges left and right constantly.
That said, no challenge can ever bring your business down if you are able to avoid these mistakes:
1. Chasing Investors rather than Customers
This is one of the most basic mistakes that budding entrepreneurs make. They work too hard on attracting the investors but barely spend enough time on their product or service itself. This strategy usually fails because the investors provide working capital only when they see a product that’s engineered to perfection and shows potential. So, if you seek investment for your startup, then make sure that you have a finished product and proof of concept.
2. Moving Ahead Without a Plan
You can’t build a business on sentiments and passion alone. While these ingredients are certainly essential, they can’t be translated into actual results unless you have a solid game plan.
It’s critical that you create a detailed and well-thought-out business plan that covers all the fundamentals such as:
• Company description
• Market analysis
• Service or product line
• Marketing strategy
• Financial projections
Your plan should also have fixed timelines and tangible targets (both short-term and long-term).
3. Avoiding New Technologies
The SaaS model has become a boon for startups as it allows them to use enterprise-level services at affordable prices. There is also a huge variety of automation and artificial intelligence-programs on the Internet like chatbots and invoice managers that the forward-thinking businesses are using today. So, if you want to stay ahead of your competition, then you must embrace the new technologies.
4. Building a Business Without a Brand
Every entrepreneur wants to set up a powerful business that has influence across the entire world. However, few realize that it’s a brand that has the power to make an impact in society rather than a company. Even fewer know the difference between the two which is that a company comprises products and services and a brand comprises the personality and image of the company.
If you think that branding is not important, then think about the solid color t-shirts that literally fly off the shelves just because they have a “tick” or an “alligator” printed on them. You can also think about a consumer electronics company that sells some of the most expensive smartphones in the market and yet has a fan following unmatched by any other company. Do you see a similarity in these examples? Yes, these companies i.e. Nike, Lacoste, and Apple are so powerful because these are not just companies but unique brands!
Here is the thing- branding is important as you just saw, but it doesn’t have to be expensive. You can create unique and attractive logos, customized business cards and social media banners, etc. even if you’re on a tight budget. You just need to find the right tools on the Internet, which isn’t even that hard.
5. Not Capitalizing on Social Media
It’s true that the right marketing strategy varies from one business to another. However, in this age of digital marketing and content marketing, you will be making a huge mistake by not focusing on social media. After all, it has many advantages like access to some of the biggest markets, targeted marketing, and cost-effectiveness. It’s also practically free if you are willing to learn the basics yourself and use a social media manager to launch and organize all your social media campaigns.
6. Playing Safe
It’s understandable if you want to take the safest path for your business. However, history has shown time and again that fortune favors the bold, especially in the domain of entrepreneurship.
To take an example, when Google was still young, founders Larry Page and Sergey Brin were quite unhappy with the company’s performance. In fact, they almost parted ways with it for just $1.5 million. In 2006, however, they bought a small video service for a whopping $1.65 billion even as many experts questioned the acquisition. This service was YouTube, and we all know what role it has played in the success of Google today. So, what does it tell you? Well, it’s that if the company had not taken the risk at that time, it might have failed completely. So, if you want your startup to succeed as well, then you must not fear taking risks.
7. Making Poor Hiring Decisions
You can’t afford to recruit the wrong people in your company, especially when you are still new in the market. You may find it hard to believe, but the original team that you will start with will decide whether your startup will succeed or fail. This is because you get only one chance to make a first impression. If your products fail to strike a chord with the customers or can’t reach the target demographic successfully due to ineffective marketing, then you may as well shut down the company.
To protect your business from all kinds of risks, pick your employees carefully and try to create a team of skilled, creative, and reliable individuals.
8. Ignoring Financial Leaks
It’s one thing to lose money due to poor business decisions, and another due to cash flow leaks that can be easily avoided. In fact, there are many common money leaks that you can identify and plug to stabilize your cash flow which include excessive financial fees, high rent, etc.
9. Keeping a Narrow Outlook
As a business leader, you want to be in control and stand by your decisions. However, you must not be close-minded either and be receptive to the ideas and opinions of others. By completely ignoring the recommendations and feedback of your staff and customers, you can end up making decisions that destroy your business.
10. Losing Focus
Business trends change all the time. New products emerge on the surface and disrupt the market, and technologies evolve to empower the businesses even more. However, these changes shouldn’t distract you from your own goals. If a rival is enjoying huge success with their new product, then learn from it but don’t copy it. You have to be focused and protect your identity in the market. Remember, every business has its own strategy, and you should stick to yours no matter what happens.
So, there you have it- some of the biggest startup mistakes that you must avoid to succeed. Hopefully, it was of some help to you. Good luck!