6 Common Mistakes of Startups
It is common knowledge that the majority of startups don’t go beyond the stage of concept development. And even if a start up has successfully passed this stage, there is no guarantee that it will progress into a profitable and successful business.
Although every business is different, there are a number of common mistakes that many entrepreneurs encounter on their way. This article discusses six common hurdles that startups come across and suggestions on how they can be avoided.
1. Don’t take too long to get started
The stage of developing an idea into a trading business should not take years. With enough focus, concept development, market research, business planning and assembling a team can be done within a few weeks. Enthusiasm is one of the key factors for success of a start up and it is a very fragile commodity. It evaporates quickly as the time goes on.
Once all the necessary initial steps are done, the business can start trading. Fine tuning of processes can be done later. The sooner you can start your business, the sooner you will be able to assess its real potential.
2. Prioritise effectively
Shortage of time is one of the main problems of any startup. That’s why smart prioritising of goals, objectives and daily tasks is key to success in business. It is more productive to concentrate on tasks, which are expected to yield 80% of future profits, and leave “small” things to worry about after the business has been launched.
This, however, can be a double-edged sword, if it takes too long to solve just one issue. If you can’t solve a problem quickly, tackle it another two or three times and move on to the next task. Avoid getting stuck on one thing; this way it’s easy to lose both time and money.
3. Don’t ignore your customers
It happens a lot. While concentrating on financial projections of the business plan, entrepreneurs forget the most important thing – their customers and their market. Detailed and thorough market research is not something that can be left for later. Knowing your market and its needs will help to avoid many costly mistakes.
Getting to know professionals in your industry and your end-users is paramount. They can point out potential improvements for your business. At the end of the day, it is customers who make a business a success or a failure.
4. Work on improving your business
Every startup makes mistakes, it is unavoidable. But the important thing is to work on them, making improvements and developing competence. You will not always be able to find a ready-made solution for your problem, as, in reality, every business has its own issues. However, chances are that someone somewhere has had a similar issue before and you can learn from their experience. Internet is a very powerful source of information and there are professional consultants for almost every problem imaginable.
5. Communicate with your staff
Entrepreneurs get very passionate about their business idea and they enthuse everyone involved. That’s why building a team of like-minded people for a start up often happens quickly and almost effortlessly. As time goes by, though, the staff motivation subsides. And so the entrepreneur is left to pull the team along.
It is important to learn how to work with your team. Every person that left your business means reallocation of resources and search for a replacement. And that brings delays and gaps in performance. Keeping staff motivation high and unremitting encourages people to give their best every day.
6. Prepare for the worst
The old adage says Hope for the best, but prepare for the worst. Always have a Plan B, which will help your business to come out on top in tough times. As the GFC showed, investments can dry up and customers can tighten their belts and stop buying many products or services. So it is paramount to focus on financial viability of your startup from the very beginning, in order to make it break-even as soon as possible.
When you encounter a problem, don’t lose your faith. If you’ve got a good team or a good plan you can move mountains.
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“Many of life’s failures are people who did not realise how close they were to success when they gave up.”
Thomas A. Edison
American inventor, scientist and business man