Starting any business is difficult. Launching a startup is even more challenging. Going from startup to business success is a long rocky road filled with pot-holes and land mines. Even when you have an exceedingly awesome idea, complex problems arise, such as regulatory changes, handling finances, staffing problems, technological changes and competition.
Due to a lack of experience, many startups endure the misfortune of failure — if they ever launch at all.
I have failed at a few as well, but there are lessons in failures. Lessons you might never know until you start. Only practice can teach certain lessons but there are those that you can also learn and be mindful of before you start. There’s no wisdom in making the same mistakes that others have already made in the past. Here are some of the mistakes. Be sure not to commit same.
Your product is not supernatural. Market it
Many start-ups make the mistake of thinking that their product is one of a kind. They believe that they are the only one with that smart idea in the whole world or that no one in the world possesses their abilities and skills to launch a similar product or provide similar or even better service. This thought, makes them relax on their marketing efforts, with the assumption that their extraordinary product or service would sell itself, naturally. In few months time, demand for their products begins to dwindle and sooner than later they are out of the market. Dead!
Heavy fixed asset investments
Many times I have seen very small start-ups committing over 70% of their starting capital in fixed assets such as office and vehicles. They believe that a good looking shop, ultra modern offices, sleek cars, and expensive computers are the generators or drivers of revenue. They neglect the important aspects such as skilled and experienced staffing, marketing, quality products, cash flow management, networking and strategic partnerships, innovation, training and development. Soon, they are cash-strapped; liquidity crunched. They find themselves entangled in debts and out of business in the months after.
Indeed establishing a company is hard work and it often takes more than a single individual to launch a business. There are highs and lows, not to mention some tasks that only a few can undertake alone. Devastating blows and setbacks sometimes make it hard to keep going without another person’s support. Then there’s a need to market the plan and build the product or service. Money has to be raised to launch the startup. Diverse skills, knowledge and experience are required to take a start up beyond its first five years, and one person may not possess it all alone.
Blinded by love
Entrepreneurs are a passionate breed of people. They stick to their idea, dedicated and highly focused on it. That’s how to get fuel to run it – intrinsically. However, many at times, this love for the idea and business tend to blindfold them. They are not open to brilliant suggestions from anyone. They just want to stick with their original plan and would do anything to ward off suggestions that would slightly change the original course. Alfredo Atanacio was one of such who was stuck to his initial idea for several months until he realized that his business was struggling to get customers. “I fell in love with the idea, and I resented it when people told me how I should be running the business,” said Alfredo Atanacio, founder of Uassist.ME in 2009. He later changed his model and pricing as suggested, and now has a vibrant business. “You become blind, and that’s an expensive mistake” he added.
Planning too much
It is true you need a business plan. Or maybe not. Spending too much time dithering about the details of your idea, and you just may plan yourself out of business before you even start. You must plan before you start but don’t spend your whole life planning it. Start and solve the problems as they arise. That’s how to go. You cannot have a perfect plan that foresees every opportunity and obstacle. Start.
Your customers are the reason why you are in business. It is because of them that you start a business. All their concerns must be addressed appropriately. There’s no point attending to other aspects of your business when you are not listening to your customers. When they are gone, you have no business.
Perfection is far away
No business is perfect. Some start ups expend so much resource in an attempt to be perfect. No. They end up looking in the wrong direction. They fail in an attempt to become perfect, whilst those with a not-perfect product and services become the giants on the globe.
Poor cash Management
It is not only big businesses that require proper cash flow management. Start ups need it even more. No business can survive on poor cash management. Start ups have failed because of impulse buying, delayed cash collections against hastened payments, unnecessary investment in property, plant and equipments, over-stocking and wrong timing and terms of borrowings.
Inability to Pivot
An essential attribute of successful entrepreneurs is their ability to pivot, a post by John Rampton posits. I agree. Every entrepreneur will say that nothing ever goes as planned. But being able to pivot is part of the game. At one time Nokia had a paper mill and made rubber boots. Today, it’s a telecommunications company. Odeo once existed as a podcasting platform. But when Apple launched its podcasting platform, Odeo had to pivot. Today Odeo is that social media outlet known as Twitter.
There are other mistakes but these lethal mistakes ought to be avoided. They can knock your startup out with a single punch. Good luck. Share and leave your comments in the comment box.