Whenever you are starting a new business, the big part of it is to have discipline to act on it. The journey towards a successful startup isn’t always glamorous and requires a process centric approach to solve the problems and taking steps to avoid mistakes is part of the process. A few common costly mistakes can sink your bootstrapped business. Mistakes are common; in fact they’re inevitable. They also can make you a more cautious and wiser businessperson. Many wrong decisions can be quickly fixed while others may cost you precious time and money.
Unfortunately for many, the failure rate is extremely high – generally 50% to 70% of small businesses fail within the first 18 months according to business insider. Here are nine mistakes you should avoid when starting a new startup:
Mistake 1 – Not investing enough in people
In growing your business, there are a thousand ways to spend your money, but there are three that matter most: people, marketing and learning. Considering that the largest portion of your operating costs is likely to be consumed in salaries and wages, it is critical that you get team-building right.
One bad hire can sink your business. The cost of hiring a poor performer is not just the salary you have paid them, But, its much higher considering the significant time and resources you’ll spend to replace them. Poor performance hurts the startup to grow, so invest in quality people.
Mistake 2 – Not spending enough money or spending too much money
There are two mindsets that are seen among the entrepreneurs. One, those spend money to make money and others who spends bare minimum until they see some decent cash flow.
Both of these attitudes, when taken to the extreme, can be harmful. Spend your startup cash wisely, but don’t be afraid to invest in good people and quality products. This will go well for you in the long term.
Mistake 3 – Thinking you don’t have competitors in your market space
The excitement of new startup might lead the entrepreneurs to think that there are no direct competitors in the space which they are operating on.
In reality, its is extremely rare to find a product which doesn’t have a direct competitors. Unless, you have created completely a new market space altogether, there is someone who has already explored your market space. So spend time on understanding about your competitors and how you can be differentiator in your business space.
Mistake 4 – Not thinking of marketing
There is a common belief among entrepreneurs that if you build it, they will come. They think the product is so revolutionary that they can just rely on free PR and word of mouth.
Reality is different, and majority of startups need to invest heavily in marketing. This might include content marketing, paid advertisements, SEO and PR. Its always helpful to take a look into what your competitors are spending marketing money. And, then ask yourself how can you complete and what can differentiate you.
Mistake 5 – Expecting those around you to be excited for you as you are.
Like it or not, people constantly compare themselves with each other. Its feels wonderful to hear news about the celebrities and superstar achievers and see them successful in achieving something which are out of reach. But if the same occurs in their immediate circle, someone just like them, breaking out of herd and overcoming all the obstacles and succeed, it makes them feel bad, and your success disturbs them.
Oh, sure, they’ll say they’re happy for you. They’ll say they support you and your dreams. But secretly (maybe even unconsciously), they are hoping you will fail. It’s natural to feel excited about your possibilities and potential, but don’t get carried away. Prepare yourself for the emotional turbulence ahead, including the negative voices of the people in your life.
Mistake 6 – Thinking you can do all yourself
In the beginning, it’s common to think that no one can do the job as well as you can. You know your products inside out, and are the only one who truly has the passion to make the business succeed.
But in longer run, this can burn you out, and create obstacles or slow-down your success. Having a mentor can give you the needed perspective that can help you in your startup journey.
Mistake 7 – Feeling disabled by the fear of “What if”
Dare to fail, and you can achieve greater heights. Being scared of failure and rejection is understandable, but letting yourself become disabled by this fear can significantly hinder your progress.
Recognising the common fear upfront will help you cross those hurdles. So start conquering them beforehand.
Mistake 8 – Being in love with the product, and not your buyer
Its understandable that you are passionate about your product as you have spent hours working on it to make it excellent. Unfortunately, the top products in any category is not the one which is the best product but are the ones which sells to the end users driven by marketer.
Your product accounts only 10 percent of your business success, and the rest 90 percent comes from sales and marketing. So you need to become an expert at sales and marketing.
So the first step is to fall in love with your prospective client. Understand them, and feel their hopes, desires, fears and problems. And, transmit love through your marketing communication, and connect heart to heart.
Mistake 9 – Having to small profit margins
A healthy profit margin defines your success. Setting it too low upfront will make your life more difficult in future, as your customer will not be thrilled when you need to raise the price later on.
So, take a deep look into the product and operation costs and determine the flexibility of pricing accordingly.