Starting a business isn’t always an easy ordeal. While it’s easy to think your business idea is a good one, it’s an entirely different story when trying to convince investors and buyers to jump on your wagon. Recent research has shown that startups are more likely to fail than succeed and while that is a scary fact, it certainly doesn’t have to hold true for you.
Here’s the deal – startups fail, not because they can’t succeed, but because they don’t know how! When you do the wrong things in business, you’ll definitely get the wrong results. Here are four common mistakes that have brought down many promising startups – and how you can avoid them.
1. Launching without a Clear Plan
If you fail to plan, you plan to fail…says the old maxim and when it comes to launching a startup, this is definitely true. It’s easy to get all excited when you know you’ve got a great product, but developing a product and launching a business are two completely different things!
Before you even think of launching your product, you need to perform an in-depth market research and understand what the existing data is saying. You must fully evaluate the existing level of competition and map out a fool-proof strategy to break through the noise and get your product to your target audience. In other words:
You. Need. To. Plan.
Failing to do this from the onset will set you up nicely for failure. So, among other things, you must develop solid business, marketing and financial plans, set smart goals and outline the precise steps you’ll take to achieve those goals.
2. Trying to Do Everything Yourself
There is a common saying – “if you want something done right, do it yourself.” But, there’s a little problem with that approach – you’re not good at everything! So, if you try to do everything yourself, you can be sure of one thing – you won’t get the best result. So, what do you do? Two things – delegate and outsource!
Believe it or not, the only reason you have employees is so that you won’t do everything yourself. That’s why you need to start delegating tasks to your employees based on their skills. You’d be amazed at how well the job will be done, once accompanied by detailed instructions.
On certain occasions, though – especially when dealing with taxes or legal issues – you may need to outsource the task to an expert. This is certainly not a time to experiment with some free “how-to” guides, because if you fail to address some critical issues at this point, it can come back to haunt you later. So, when you need an expert eye, go out, find the expert and pay for their valuable expertise.
3. Scaling Prematurely
Another major mistake many startups make is premature scaling. According to a report published by Startup Genome, 74% of high-growing internet startups failed because they scaled too soon and too fast. It’s easy to feel on top of the world after a successful fundraising, but if you spend the money on the wrong things, you’ll definitely rue it down the line.
So, what do you do? Simple – be strategic with your spending. Don’t hire a new employee unless it’s an absolute necessity. Sometimes, it’s way more efficient and cost-effective to outsource a business process to freelance professionals instead of hiring an in-house employee. The bottom line is – make sure you’re making more money than you’re draining out.
4. Underestimating How Long It Takes to Make a Sale
Alright, my enthusiastic friend, here’s another important fact to need to wrap your head around before launching your business – sales take time. Remember that! Many startups make the mistake of thinking huge contracts and enterprise deals will come rolling in within a few months of launching their product.
And while this holds true for some people, it’s certainly not a universal norm. In reality, it can take up to a year to close such huge deals, because there are usually several stages of approval involved and that definitely takes time. Once you account for that in your business plan, you’ll be saving yourself a lot of headache down the line.
And there you have it! Get rid of these silly startup mistakes and you’ll be nicely set up for a successful enterprise!
You’ve got this!
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