So you have come up with the most brilliant startup idea yet. The market is just right, and everyone you have shared the idea with agreed that it’s ingenious. With a clear roadmap for securing funding to envisioning day-to-day operation, there simply isn’t anything that could go wrong now.
However, it may be a little too early to start celebrating just yet. Studies say that 9 out of 10 startups fail to make it past the five-year mark. So, what makes it click for that 10% while the remaining 90% stagger and stumble along the way?
Experienced industry experts opine that the answer lies in the common mistakes that more than 90% of startups are prone to making. Read this post to find out about the five most frequent errors in the startup industry. Avoid committing the following, and you will have smooth sailing with your business right from day one.
5 things you should avoid doing in a startup
1. Undermining your product or service
Be it the lack of confidence or the fear of rejection, sometimes startup founders hesitate to put a deserving price on their products and services. From recycled furniture to new-age geriatric care, no matter what your grand start-up idea is, make sure you NEVER undermine it.
Look into the bigger picture. See how it contributes to your business scheme and the market at large. Find out all about the things it can bring to the table. Set prices that are in sync with the value it provides. Do not fall for the undervaluing trap because it can lead to loads of frustration and disappointment at the end of the day.
2. Hiring the wrong kind of people
A Careerbuilder study states that 41% of businesses estimated about a $25,000 loss over a bad hiring decision. If you do not want your startup to meet the same fate, know who you are hiring and why. Apart from reduced productivity, a bad hire can cost you loads of revenue too.
Determine the roles you need to fill at the earliest in your startup. Create a pros and cons list for each role. Create another shortlist consisting of the indispensable ones among them. More often than not, weighing in the pros and cons of the roles that you need for your startup can provide better insights for a hiring decision. Pick people who are passionate, committed, hold a certain level of expertise in their fields, and will be willing to take the reins of creating a successful startup from scratch.
3. Calculating cost projections all wrong
If it is your first time trying to set up a startup, then you may be more prone to this mistake than others. Cost projections usually come in on the lower side when you are trying your hand at accounting tools for the first time. The sole reason for this is that budding entrepreneurs have a tendency to project higher sales.
When you know all about the cost projection techniques, this problem is sure to dissipate. You will need to get a dynamic accounting mind on board for that to happen. Account for the unknown and unforeseen reasons that may lead to higher costs than planned. Be prepared for all kinds of possibilities. Lower the projected profit margins, and you will be good to go.
4. Not having a clear idea about the target market
Knowing who your target market has to be one of the most important things you must learn as an entrepreneur. Make sure you understand the critical parts of your marketing strategy. Choosing the wrong demographics may lead to all sorts of complications for your business.
If you are launching a new product or tool say a, plagiarism checker, then the target demographic should consist of students and working professionals, both male and female. Beard grooming kits, however, will have a separate target market base altogether.
Invest time and effort in market research carefully before you shift the gears in your startup for best results.
5. Taking too much on to your plate
Learning all about the tricks of the trade is something that you must look into as a budding entrepreneur. However, that does not mean you need to do everything by yourself. Trying to make all the boxes tick by yourself can be a long and difficult process. More often than not, it will result in taking up a lot of your time that you could have used to hone other aspects of your business.
The key to setting up a successful startup is to learn to delegate effectively. Assign different sections of your business to people you trust. Free up your time. Use the freed up time to focus on other business activities that require your unique sets of expertise.
6. Bonus: Making it all about the process
Sure, documented processes are effective. But you need to know when you are overdoing it. Doing away with process waste is one of the best methods to streamline the way your startup functions.
Physical waste, like moving and transportation problems and unsafe working conditions, put a spanner in the works for every business. So, make sure you choose your office space carefully. Information waste like opting for manual methods instead of digital ones or unclear data can also lead to multiple issues. Holding ineffective meetings and not specifying roles clearly results in human resource waste. Know how to cut down on process waste to make your startup function like clockwork.
Starting your own business is sure to pose a bunch of challenges along the way. But the trick is to learn to roll with the punches and make the most of every problem that you face. From not having a proper budget plan to not learning how to delegate, most first-time entrepreneurs make a few mistakes, especially if it is their first time around the startup industry. Go through the five don’ts of startups to determine the right track you should be taking your business. Keep these in mind, and you will succeed in taking your startup to newer heights. Godspeed!