We all make mistakes. And that’s a good thing. It helps us learn. But making mistakes over and over again- now that’s a different story.
As a fresh candidate in the fierce economic market, you can’t afford to do that. If you’re not careful, your mistakes could cost you your company.
The U.S. Bureau of Labor Statistics shows that 20% of new businesses fail within two years of operation, while almost half won’t see their fifth birthday.
What are they doing wrong?
Or, more importantly, what should you avoid so that you don’t suffer the same fate.
1. Don’t expect to do everything yourself
You are not Superman. As the founder of a startup, the biggest mistake you can make is taking on the entire project. This is not a one-man show. You have to build a team around your idea in order for it to take off successfully.
Though you may feel as if no one will truly understand your business the way you do, continuing at this pace will only make processes slower, less creative, and less productive.
Take the time to onboard experts that can carry your startup to greater heights. Typically, hiring four to six people is enough to get off to a smooth start.
2. Not investing in a marketing strategy
Startups are excited about getting their ideas off the ground. This often pushes initial marketing efforts into the sidelines. However, marketing is essential in generating brand awareness and revenue, both of which are quite important for a budding business.
The key is to set aside a marketing budget, no matter how small that may. Investing in cost-effective elements can help reap the best results. And that usually means startups should focus on their blog and social media profile before anything else.
3. Not thinking twice about where the money is going
Startup owners can sometimes get overly optimistic. Don’t get me wrong. That’s a good thing- as long as you remain realistic. But spending too much too soon or mismanaging the budget can siphon cash flows from areas that need it the most.
Startups have limited capital. They need to focus on funneling it into activities that aid in the business’s development and growth instead of office furniture or fancy launch parties.
4. Not taking the time to understand customers
A business is only profitable if there is a demand for its products and services. So understanding your customers should be at the top of your to-do list. You will need adequate knowledge of your target audience before you start. Research the market and talk to other businesses in the industry.
Even after doing your homework, you should continue to assess your customers regularly. Understand that their needs can change. The feedback they give will keep your efforts on track. If your current offerings do not align with their requirements, you can produce another product that can continue to keep your startup successful.
Not adjusting to changes in customer demands or market trends is sure to drive your startup towards failure.
5. Forgetting to research the competition
Knowing the competitors in the industry is as important as identifying your customers. Both help to validate the demand for your products and services.
To ensure your startup has a good shot at success, consider entering a market that is not too saturated. More importantly, your customers should recognize that they need your product or service.
6. Neglecting to incorporate newer technologies
Businesses on the digital landscape are built from the ground up with technology in mind. However, it is imperative that you keep up with emerging trends.
Adapting to change and incorporating emerging tech will help keep your startup competitive. Other startups either begin with these ideas in mind or are quick to get them on board. Not moving in the same direction could place your startup at a disadvantage.
Whether it’s AR, AI, chatbots, voice search, analytics tools, or any other innovative concept, you need to make sure any tech that aligns with your startup is integrated into your business as soon as possible.
7. Not giving yourself a salary
Often when individuals build a startup from scratch, they consider it as an extension of themselves. Thinking that you are your business and your business is you can be detrimental in the long run.
You should pay yourself a salary, much like other employees in your startup. After all, you are putting in as much effort as everyone else- or even more. The key is to fix an amount that is not too much or too little.
8. Undervaluing the price of the product or service
You’re establishing a startup to make money (unless you plan on running a no-profit-no-loss business). So there’s no shame in saying this aloud.
In order to generate enough money to keep your startup viable, you need to ensure that you earn enough ROI. And that begins with deciding on the right price for your product or service- not too high nor too low. If you price it right, you can earn a solid customer base that will be more than happy to return to your brand over and over again.
9. Overlooking the importance of legal protection
According to Heather Green Miller, owner of HGM Law Office, startups often make mistakes in three crucial areas:
- Not registering their business
- Not picking the right business entity
- Not protecting their intellectual property
Your startup is your brainchild. It’s going to need a lot of enthusiasm, positivity, time, and effort to get it up and running.
But along this journey, you’ve got to learn to be flexible. Remaining too rigid can cause your startup to break. Take inspiration from YouTube. It was meant to be a dating website. Look at where it stands today.
So even if nothing goes the way you thought it would consider the opportunities that come your way. It just may be what you’ve been looking for all along- success.