Many businesses do not survive the first few years after launching. While some of these failures are no fault of the business leaders, many of the collapses come from avoidable errors. Of course, there is a learning curve for all startups, but you can learn to manage that curve without crippling the business. Here some typical startup mistakes and how you can avoid them.
Don’t Try To Do Everything Yourself
Most startup entrepreneurs are jacks of all trades: they can quickly learn and perform a wide variety of roles. That’s not surprising because when you start a business, there’s the temptation to try and do everything yourself to save money. But if you want your business to grow and scale, you have to bring in experts in various fields. For instance, you may be able to do simple financial calculations, but that does not compare to what an accountant or financial analyst can bring to the table.
In the early stages, hire talented freelancers who can help. Their experience and expertise will help you do what would otherwise take months. The best part is that hiring a freelancer is usually cheaper than full-time hires. Alternatively, you can get people to work with you with a promise of shares or stocks as the business grows.
Try To Use The Best Technologies Available
You’ll be surprised at how many companies are hesitant to embrace new technologies. Many companies only sign up after other companies have used the technology for years. But startups do not have that luxury. You need to be creative and innovative to compete with the behemoths in the industry. That means you’ll have to use technology to get ahead of the curve. Always be on the lookout for better ways to perform tasks. From Trello to MyFax, there are many software tools available to streamline your business and help you run it more effectively.
Don’t Always Rely On the Best-Case Scenario
Usually, startup leaders are full of enthusiasm and drive that they always anticipate the best-case scenario. In many instances, such expectations are not reality. As you strategize to make your product or service the toast of your customers, prepare and plan for things to go awry. That way, you won’t be caught off-guard when challenges arise.
When difficulties arise, entrepreneurs have to learn how to pivot. In fact, some of the best companies in the world were born through pivoting. For instance, Nokia used to have a rubber mill. Today, it is a full-fledged communications company. Odeo used to be a podcasting company, but it pivoted when Apple launched its podcast. Today, Odeo is what is globally known as Twitter. Your ability to adapt to the changing world is what will make your startup a success.
Always Conduct Market Research
Before you launch a business, you must conduct extensive market research. Such research gives you insights into the preferences of customers and what products or services are likely to work. You’ll also get an idea of what keeps customers coming back and what drives them away. To keep your business afloat, you’ll need to conduct research periodically since customers’ tastes and preferences change with time.
Besides finding out what your customers want, you need to study the market to understand your competitors and discover new opportunities. Knowing your rival business’s strengths and weaknesses help you know what to emulate and what to do differently. Read this comprehensive article from HubSpot to learn how to conduct proper market research.
Learn To Manage Your Money
Regardless of how captivating a vision you have, your business will only last as long as your finances do. That’s why every company must be cautious about how they spend their profits. It’s tempting, especially when you have venture capitalists or angel investors supporting you, to be unhinged when spending money. Whether it’s new hires, expensive equipment, or costly marketing campaigns, you have to ensure that you get value for money with each investment. Here are a few steps to help you manage your cash flow as a startup.
First of all, draw up a budget and stick to it religiously. Only spend outside your budget when a once-in-a-lifetime opportunity presents itself. Run a tight ship at the beginning and only purchase what you need to run the business. Secondly, keep track of all your income and expenditures. Having records of your expenses helps you keep tabs on where your money is going so you can plug any leaks.
Additionally, make sure that there’s a clear distinction between your personal and company funds. For many founders, particularly at the business’s initial stages, that line can be easily blurred, leading to all kinds of financial blunders.
Focus On Customer Acquisition & Retention
Without customers, your business will be nothing but a daydream. Your clients should be your priority, so always look for ways to make them happy. Unfortunately, many business owners lose sight of that and invest their time and resources into building a good team and product – neglecting the all-important tasks of attracting and retaining customers.
Find smart ways to entice customers to use your product. You can run promos, discounts, and campaigns to get more people interested. Once someone makes the first purchase, be keen on getting them to become a repeat customer. You can do this by cross-selling or upselling. Run loyalty programs and reward customers who keep their faith in you.
You Can Make The Right Decisions
Some feel that business leaders must make several bad decisions before experiencing success. While you will undoubtedly experience some bumps, there are many bad decisions you can avoid. All you need to do is learn from organizations that have gone ahead of you, especially those in your industry. Also, surround yourself with advisors and thought-leaders who can give you sound guidance and expert advice. In sectors where you are not an expert, defer to the counsel of those who have more experience.