Thousands of Start Ups are launched every year and they come with great enthusiasm and flair, but there are also plenty of failures with not many reasons. Almost all of these Start Ups have some typical reasons in common that play a role in their failure even before the are established properly in the market. Yes, there are a lot of things that can go wrong. Yet, it is important for businesses to avoid falling into the same trap over and over again.
Let’s go through the 11 Typical Mistakes Committed by Start Ups and learn from them.
1. Moving Without a Business Plan
Although planning can be mind-numbing, without a road map for your startup, you cannot be able to succeed. Most importantly, the road map should cover all the research work like business research work and market potential, and also the financial planning that you will be managed behind the scenes. It is absolutely must for any start up to have a solid business plan which plays a vital role in future success. Business plan provides a certain direction to the company and all efforts are bound together.
2. Not Hiring Experts
Another major blunder is not hiring Experts. It is very important for business owners and entrepreneurs to hire experts to handle the things that they either don’t have time for or don’t understand. The advantages of hiring experts are much more than the funds spent on hiring them. Its essential to understand that applied knowledge is power – many people think knowledge is power but only when you do something with that knowledge, does it have power. The Experts Team could include Tax Experts, Legal Consultants, Business Coaches, Finance & Accounting Experts.
3. No Delegation
Entrepreneurs tend to have an attitude to take on everything. It is not possible for one individual to be good at everything, and even if it is, he needs to focus on the more important aspects of the business. What can be outsourced should be outsourced. Cost cutting here is not a very advisable move. One ends up fatigued and forgets the the true reason for why he started the whole venture. Once what looked like a dream and passion, suddenly starts to look like a burden. Delegate by selecting the right man for the right job and develop a system that monitors their work.
4. No Data Analysis
One of the most common mistakes that startups make is that they are moved largely by instinct and their belief in their idea. Of course there is nothing wrong with this approach, but there is difference between being passionate and being ignorant. One cannot ignore market trends, consumer behavior and trends, pricing, affordability factor, spending capacity, competitors, competitor’s strategy and many other factors. A start up needs to think in line with longevity, sustainability and a vision to grow. None of these can be achieved without marking and analysing numbers. Data analysis is a key to understanding how to position, price, place and move the business. Market trends suggest movement of the business and that is all hidden in the data sheets that need to be diligently studied & monitored on a regular basis. Many start ups fail to follow this golden rule and end up wondering about how a brilliant idea got rejected.
5. Moving Too Quickly
In the haste of expansion and impulsive decisions lead to cash being spent on wrong things. Excessive funds go towards marketing or hiring without analysing the need for them. Spending hoards amount of money is not necessary for expansion. Expansion is good, but welcomed only if there is a capacity to sustain. Wiser and economical options are available for marketing businesses these days and they should be harnessed to their optimum first. The most important tip here is to “not spend till u know where to generate more”. Every business has an incubation period and over the time it settles , makes it’s place in the market. Following wrong ideas and trends from unfamiliar market will only lead towards a blunder. It’s essential to study, analyze, identify and then take the next leap.
6. Lacking the Ability to Innovate
It is very common that the start up holds on to the original idea which was the original driving force and is unwilling to deviate from it. There is a element of emotional attachment that doesn’t allow deviation. Least is it understood that innovation is the next name for survival in today’s fast moving business world and it can take the business to another level altogether. There are very many chances that the original idea may become obsolete or becomes difficult to execute. It takes a lot of courage to innovate and deviate from a original idea and the startup has to do it. However the same has to be based on multiple factors since one never gets a second chance for deviation. Being unable to deviate at the right time may turn in to a big disaster.
7. Considering Money is The Solution
Most Startups face a money crunch due to wrong spending, miscalculated moves and unavoidable expenses. Whenever the business is low, the startup is busy raising funds, rather than moving towards understanding the fundamental problems which are holding back the business. And suddenly we see start ups running behind investors willing to comply with any terms and conditions. Many of the startups have bombed, due to this very move. Raising funds would not be the only way to solve problems. Fundamental issues need to be fixed first and then worry about the money.
8. Not Identifying Ideal Customer
Identifying your Ideal Customer is one of the vertex of successful marketing campaigns. However, it’s not enough to create a marketing budget and by trying a small amount of everything. You need to do all kind of market surveys and research so that you can easily identify your customers. Moreover, you will be able to figure out the answers to a lot of questions such as, where you connect with them and how they will respond to your marketing strategies. Being particular about these fundamentals will help you to gain clarity to your business plans as well as it provides a focus on your resources. Identifying the right customer base and pitching to them will indeed keep the ball rolling.
9. Spending too Much
Overspending is one of the most common mistakes done by startups. An idea of a start up drives it to establish a business but does not give adequate knowledge of finance and accounting. At some stage, every entrepreneur will deal with the problem of overspending for being not able to anticipate these issues. Improper planning & budgeting always leads to this vulnerable situation.
Most Common Mistakes Leading to Overspending.
- Lack of Planning
- Wrong Suppliers
- No Data Intelligence
- Cost of Acquiring goods is not calculated
- Cost of Goods, Services & Raw Material
- Bad Accounting & Poor Financial Discipline
- Office Decor & Arrangements
Keeping these vital points in your mind will always give your business enough time to evolve naturally. Also keep track on your spending from the beginning.
10. Failing to Select The Correct Team
A right man for the wrong job would give low productivity and the wrong man for the right job could end up in a disaster. That’s exactly why, selecting the right candidate for the job becomes important. Finance budget constraints also play an important role in hiring, but as the age old metaphor goes, “if you throw peanuts, you will get monkeys.” Here one needs to average out and balance. No personal favors, obligations or influence to direct the process of selection. The best way to select your team is to include skilled, flexible, trainable, motivated set of people even before you start. Pre-launch briefs, product and system training would help them align with the thought process and vision of the start up business.
11. No Formal Training for Employees
It is a myth that Training and Education is required only for established businesses. It is the very foundation of the organization, a habit of which eventually becomes a culture. Training nurtures and educates the employees about how to perform in a certain way that in turn minimizes mishaps and facilitating growth. Coaching programs help opening up their minds to broader perspectives and greater horizons, keeping them looking forward for more. A well trained team performs at their optimum level in comparison to an untrained group of employees.
Well, having mentioned all of the above, we all make mistakes in life, as we all are humans. But if you are sensible enough to heed the above advice, then you can enjoy the ultimate benefits of entrepreneurship and could be able to avoid the typical mistakes of startups. So, just be focused and passionate about your goals. If you can do that, and remain flexible when you do make a mistake, success will be within your range.