Getting a startup business off the ground is no easy task. In fact, some sources claim that as much as 90 percent of all startups ultimately fail. Many of these failures are the direct result of common mistakes that can easily be avoided. If you are working hard to get your startup business up and running, be wary of the following errors.
Planning but not Acting
Timing is extremely important in the startup phase of a business. Unfortunately, when your whole company is just a few co-founders, it can be challenging to know when it is the right time to pull the trigger. Many entrepreneurs try to plan every detail and ultimately never act on their ideas. Whether they lose momentum or a competitor overtakes them, the end result is a business idea that never quite gets going.
Failing to Secure Necessary Capital
Perhaps the single most common reason for small business failure is undercapitalization. As a rule of thumb every business idea will take twice as long and cost twice as much as expected. Failing to secure enough capital to keep the lights on until the business becomes self-sustaining is a common and easy-to-make mistake.
Not Emphasizing Profitability
No matter how much money you raise to start your business, it will eventually need to support itself. However, many entrepreneurs fail to sufficiently emphasize turning a profit. Many try to create too elaborate solutions rather than starting by selling a minimum viable products. Others are too loose with their expenses. In either case, they fail to build profitable core businesses in time to keep their startups going.
Passion is absolutely essential for being an entrepreneur. However, it is possible to love your idea too much. If you are unwilling to change your plan, you will undoubtedly find yourself in trouble. Most business ideas need to be refined and optimized over time. Being so inflexible that you are unable to make necessary changes will surely spell the end for your startup.
Many entrepreneurs tend to be curious people who can see opportunities in almost any situation. This is a good thing as long as it doesn't lead to chasing too many of those opportunities. Startups are most successful when they keep it simple. A common error made by startup founders is that they lose focus on their main business ideas in order to explore other paths.
Not Listening to Customers
The purpose of every business is to offer value to customers in exchange for payment. As such, giving customers what they want is very important. No one knows what your customers want better than your customers. Failing to listen when they try to tell you how to make them happy is a huge mistake.
Hiring the Wrong People
Startups are fragile. Even one bad team member early on could be disastrous for a small business. However, every entrepreneur will need help from a team sooner or later. Rushing through the recruitment process in order to lighten their workloads causes some business founders to hire the wrong people.
Staying Too Long in Startup Mode
Most businesses start in a home office, spare bedroom, or dorm room. This arrangement can work great for when the company is only a couple of founders. However, as the idea evolves into a functioning business, it is essential to transition a dedicated workspace. Entrepreneurs who fail to do so often lose momentum because they are never ready to take their businesses to the next level.
All of these common mistakes could spell the end of your growing startup business. The odds may be against you, but fortunately all of these errors can be avoided. Simply being aware of these risks is a major step towards success.
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Lindsey Patterson is a freelance writer and entrepreneur who specializes in business technology, customer relationship management, and lead management. She also writes about the latest social trends, specifically involving social media.