As per Forbes, nine out of ten startups fail. Starting a business is challenging. Even more difficult is launching a startup. Many entrepreneurs have little business experience, making the challenge of attempting to build a company from the ground up even greater. Even when they have an exceptionally incredible fresh and workable idea, figuring out how to manage the young enterprise, handle finances, and find employees on a budget are all difficult problems. We have listed the top 10 big mistakes that startup founders make:
Failure to define and analyze your target market and audience
Building great products doesn’t always result in a successful business. It’s crucial for startups to first understand their target market or customers before proceeding with a project. Maybe a market that the company focus on is simply too small to build a big business in or the market has poor competitiveness or weak product demand.
Not launching at the ‘right time’
Companies should not launch a business without analyzing if the business is ready for the market. Often, firms seek perfection before launch, leading to delays in the launch. What matters is that the business is launched at the right time, not too early or delayed, and as per the market’s requirements.
Not having the ‘right Co-Founder’
Finding the right co-founder is vital to any startup’s success. One must look for a partner who shares common values and desires. The co-founder must be willing to take the same degree of risk and think similarly about ethics and moral decision-making, just as the founder.
Trying to do everything alone
Entrepreneurs often fail to surround themselves with the team and try to operate independently. An entrepreneur without a team lacks trustworthy seasoned advisors to discuss business ideas, strategy, growth and challenges.
Overlooking legal requirements
Getting a business registered is important. Forming a registered entity is important. Protecting the brand and intellectual property is important. If overlooked, their consequences can cost any business valuable time and money.
Expanding too early
Organic growth is ‘the king.’ It can be slow, but it is important for any startup’s strong, powerful, positive growth. Also, if the business scale up, it is important to analyze if that’s a growth or a temporary peak. Success must not be considered as growth.
Failing how to deal with the connected people
Startup Founders must know how to manage people involved in the business to achieve their goals. Any business’s success depends on building a friendly rapport with prospective clients/customers. The owners must also be able to communicate effectively with the employees and understand that they are the greatest asset.
Failing to manage money effectively
With little capital to work with, startups are doomed if they handle money incorrectly and are irresponsible with their cash flow. For example, hiring anyone as an employee instead of a wild, creative and agile employee who could wear multiple hats.
Failing to manage the investors
Many young entrepreneurs think that raising money is a measure of the success of their businesses. They chase investors instead of befriending investees. What matter is building a viable, growing and profitable business.
Finally, Startup Founders underpay themselves
Startup Founders’ are also a part of a business that constantly works for it, wearing multiple hats. Even at an early stage of the startup, they should treat with some salary and pay themselves a defined percentage of the revenue.
Conclusion
Although errors are a part of our lives and are inevitable, trying to avoid the mistakes would be a good idea. When making errors, learn from them and put them to good use.
Read our article: Startup India: Tax Exemptions and Incentives
