Studies show that around 20% of new businesses fail during the first two years of operation, and half of them won’t survive the following 3 years. If you are a startup owner you have %50 chance of surviving. You have to work hard and work wisely.
Here I will talk about the simple but important mistakes that startup owners might make that will lead them to failure.
The first mistake most startups do is starting without a plan. You need to develop a basic plan, it does not have to be a complicated 5 year development plan. But you need to have a road map in your hand with costs and selling strategies.
The failing startups are mostly not organized. Small businesses may seem easy but you need to be a joggler to keep things organized. You’ll have a lot of work with fewer people around you. Have a plan, delegate the tasks and follow the task lists to see the progress. That will improve your productivity.
Another mistake that startup owners make is that they do not fully understand their target audience. You need to take your time to understand the customers that you target. Your product may be perfect but that does not mean it will bring customers. You need to sell it. Do not target a small market, measure the potential of your product and focus on building your business.
As a startup owner do not neglect your legal requirements. Register your business, with the right entity.
Do not operate independently
You have a team, use it. If you try to do everything on your own, you’ll get exhausted. You need counsel, create a good team that will guide and help you.
When you are ready to get investment, do not take it from the wrong person. An investor is not a bank, find the one that will trust you and help you for growth and sustainability. And here is another mistake: avoiding a contract. You need to implement a contract for any business you’ll be in. The people you make business with may be your best friends but you need legal protection for you and for your investment.
Be mindful about your money. Do not overspend or do not pay less to your employers. You need to handle your capita in the best way. If you are not good at it, take counsel on financial matters. The most common reason for startups to fail is the mishandling of the cash flow.
One step at a time
I know you want to grow but you need to be careful. Most startups expand too quickly and fail in the end. Observe the company ghost, it may not continue steadily. Always have a back up plan and expand your business according to your growth. Don’t accelerate growth when your company is not ready.
Do not adapt to the wrong hiring policy. Do not hire the wrong people or hire more than you need. Always have the funds to pay the people, or you will fail. Do not over promise to your staff or to your customers. Alway know what you will deliver and keep your promises.
There is a 50% chance that you’ll get successful.
And finally, don’t be afraid of failure!