Eugeniya Korotya
Starting a business is not as easy as it might seem on the surface—and launching a startup can be even more challenging! This is because a majority of entrepreneurs have little to no earlier experiences in the business world. Save for an awesome idea, there are other things to consider—like recruitment, finance, legal issues, management, and so on.
We’ve all heard that that 9 out of 10 startups fail, but what are these stats based on? The Huffington Post claims that 95% of startups fail—Does that mean that almost all new businesses fail? I hope not.
However, not all statistics are discouraging. According to the US Bureau of Labor Statistics—over 55% of all newly-created businesses cross a 5-year threshold. Small Business Administration (SBA) states that around two-thirds of small businesses stay in business for 18 months and more. So, if you’re launching a startup—be sure to avoid these 6 common startup mistakes to put yourself in the best position possible.
Mistake #1: Playing a lone hand
There are several successful businesses that were started by just one person with its unique vision and strong technical skills to show it to the world. Amazon ($30.4 billion in revenue as of 2016 Q2) and eBay ($2.23 billion in revenue as of 2016 Q2) are probably the most inspiring ones. However, it is hard to establish a company when you are the only person involved.
In most cases, it’s really daunting because there are ups and downs, to say nothing about some tasks that few can carry out alone. Moreover, there are diverse challenges that require flexible approaches, like marketing, product/service development, fund-raising, etc. To avoid a burnout, it is recommended to get a co-founder/advisor to share the workload.
Mistake #2: Creating a product by rule of thumb
Drawing up a plan can be laborious and time-consuming, but without it you’ll operate in the dark. Among the most important aspects of planning to cover are financial, business and marketing plans.
Solid plan also includes research of basic business idea and product market potential. Not every startup needs a formal document, but well-structured and clear business road map can help in those cases, when company makes no headway or, on the contrary, embarks on a new venture.
Mistake #3: Hiring the wrong people
23% of startups fail due to lack of expertise, skills, motivation or shared vision within a team. Hiring the right people and at the right time is the top priority. If you start to hire people too early, then you risk exhausting your company financially. These days it is much easier to run a startup with subcontractors, freelancers, service providers (outsourcing/offshoring), etc. It is also recommended to keep everything documented.
Mistake #4: Dragging feet During launch
In this case it is critical to strike a balance because timing is everything. Launching too soon can place the whole company at risk. Make sure that the product/service is stable, up and running, otherwise users may disregard it and to win them back may be challenging owing to poor first impression.
With late release you can miss your sporting chance of success. There is a risk that you’ll run out of cash, competitors will be first to introduce a product to the world, and so on. Delaying a launch because your business/product/service isn’t perfect is a major mistake because, at the long last, you’ll adjust your business strategy as you go.
Mistake #5: Ignoring (potential) customers
One crucial element of any successful marketing strategy is knowing who your ideal customer is (it is even better to name it). Market research will help to determine your target users, their possible reaction to your marketing activities, their interest area, habits, and so on.
Further users’ ignorance, tunnel vision and failure to gather customers’ feedbacks are the disastrous flaws of small businesses. Keep communication channels open (email, phone, social media, messengers, etc.), monitor your reputation, and listen to critics.
Mistake #6: Thinking small
In business world there are mainly two types of people, ones have both feet on the ground, while others have head in the clouds. Successful startups employ both types to offset goals with capabilities. When you create something from scratch, it can be of any size you want. You’re only limited by your imagination.
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