If you are planning to start a business, there is a 90% chance that it might fail. Entrepreneurs must know about this brutal reality before embarking on the journey of building their dream startup.
Building a startup from scratch is a challenging task that demands time, dedication, and smart work. As you embark on your entrepreneurship journey, you must identify mistakes that can kill your startup dream even before starting. When a startup fails, it is actually the entrepreneur that is failing. Failing startups result in founders hopping from one idea to another. Maybe, the problem lies somewhere else.
Learning From Others’ Mistakes
Entrepreneurs know that failure is a possible reality when they start. The only way is to minimize the chances of failure by avoiding the most common mistakes that can kill your dream startup. Even some of the most successful businessmen have a history of failed startups. Jeff Bezos-led Amazon started several initiatives that are a failure now. Steve Jobs was ousted from the company he co-founded- Apple. The lesson here is you can always learn from your mistakes and ensure that they are not repeated.
But for modern-age entrepreneurs, the margin is really less. So, it is important to avoid common startup mistakes and level up in this highly-competitive environment.
6 Mistakes You Must Avoid To Build A Successful Startup
- Lack Of Planning: Deadlines, goals, and other metrics may sound cliche, but numbers are critical to measuring performance and planning for the future. A lot of founders kickstart their businesses without defining their short-term and long-term goals. Without a goal, you are directionless. To reach somewhere, you must know where you want to go. Planning is critical to hiring, fundraising, and other business operations. Also, VCs and angel investors are unlikely to put money into a business without any defined goals.
- Undefined Company Culture: “You don’t build a business, you build people, then people build the business,” Zig Ziglar. One of the most important things you can do for your business is to build a strong company culture. It pays off in the long run and helps in maintaining consistency. With a defined company culture, you can ensure seamless collaboration between different departments and staff members, ensuring maximum productivity.
- Lack Of Focus On Customers: The mantra to success is pretty simple. Successful businesses know who their customers are and what they want, but unsuccessful ones don’t. Retaining old customers and creating new ones is critical to increasing margins. In order to do so, you must develop all your business strategies with customer requirements in sight. Customer satisfaction is a key differentiator for modern business. Inexperienced founders often tend to ignore customer needs while rushing for early success. Drifting focus from customers is one of the most fatal mistakes that can kill your startup.
- Running Out Of Funds: Lack of funds is one of the most common reasons behind the business failure. A startup needs to raise funds at different stages to sustain and grow. There are multiple reasons behind businesses failing to raise funds. These reasons include the absence of a differentiator, an unorganized pitch deck, or a product with zero sale potential. If you are a first-time founder, consider partnering with an experienced startup advisory to help you with the pitch deck and other critical steps for timely fundraising.
- Poor Marketing: “Good marketing makes the company look smart. Great marketing makes the customer feel smart.” After so many years in operation, Pepsi still invests a substantial amount of money in marketing. Does it need to? Answer yourself. Saving money on marketing is like stopping your clock to save time. With such cut-throat competition in the market, you are racing against time to grab customer attention. Marketing is a proven way to do that. Ignoring marketing is one of the very common mistakes that can kill your startup. Highlight the differentiator through your marketing campaigns. Assert how your product is 10X faster, effective, or easier to use. That’s how you grab customer attention.
- Hiring Poorly: It is more about what you require than what’s available. The qualification and expertise of your employees must coincide with your goals for the business to prosper. A lot of companies simply go on a hiring spree to scale too soon without any predetermined goals. Again, the absence of a staff that can help you achieve your business goals can kill your startup even before you realize it.
Conclusion
“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion,” Jack Welch. When you start a business, you are actually creating a solution for a problem worth solving. The first step is to identify a problem that is shared by many people. Secondly, it is important to know all the pitfalls at the beginning. In order to avoid the mistakes that can kill your startup, you must identify them early. Focus on building a team that shares your vision. Create an environment worth working in. Remember, a happy team is an efficient team. Most importantly, have a well-laid-out plan for fundraising and cash usage.