After having a great weekend, you found yourself dreading another Monday, having to do a job you hate and work for someone else for hours on end. Sometimes, you talk to your friends about a business idea that you have, but you don’t have the guts to do something about it. What if you invest a lot of money and it doesn’t pay off in a year or two? What if your business fails?
These are justified fears for anybody thinking about starting their own business. It’s a well-known fact that about 90% of startups fail. Unfortunately, not all companies can flourish like Amazon and have net revenue close to $233 billion.
However, the question is, what’s harder—trying something new even if it fails, or working 9 to 5 until retirement? If you’re thinking about it and wondering, “What could go wrong,” read on to find out what three mistakes can kill your startup.
The Market Doesn’t Need Your Product
You can have a great business idea, but if there’s no need for your product in the market, your startup will fail. It would help if you considered something innovative, something that potential buyers need. What do your potential customers want to see? What would they spend money on?
It can be hard to think of something new, but who needs copies of existing brands? If you want to invent something useful, but don’t know where to start, you can ponder on what established brands are missing. Ask yourself, ”Where is the room for improvement? What do I need as a customer?” After creating your minimum viable product, start asking questions and brainstorming upgrades, combining different market research methods.
You Are Invisible
You’ve settled on an idea, tested the market with your MVP, got the funding, and got a brick-and-mortar store. Everything is ready, but no one is visiting. You are starting to ask yourself, “Am I invisible?”
That could very well be the case. Your physical store could be on a secluded street where people aren’t usually passing by. Maybe you’re far from the center of the town, and people aren’t going to look for what you have to offer next to a gas station in the middle of nowhere. It seems like an obvious mistake, but when you’re just starting your business, you need to find a good location.
You should also invest in a marketing plan for your physical store and online presence. Creating an ecommerce website or a landing page keeps your customers more informed about your business and offers. Without it, you could have a store in the town center and still miss opportunities. Hiring a marketing expert can be costly, but it’ll result in a better ROI.
Scaling Too Fast
If you are smart and a bit lucky, you’ve successfully avoided traps of not being needed in the marketplace and being invisible. Some time has passed, you’re making sales at this point, and your business is doing well overall. The next trap you could fall into is scaling too fast.
This happens when you think your startup is ready for scaling, but in reality, it’s not. You could hire too many people too early, raise too little or too much money, not adapt your business model to a changing market, or miss product/market fit.
While you may never have perfect timing, perfect product, or excellent employees, the best you can do is strategize and look at product/market fit objectively before scaling.
If you are getting sick of your regular 9 to 5 job, you might wonder, “What would it be like if I were the boss?” Having an entrepreneurial spirit and being passionate about an industry where you think you can fit in is a good starting point for your startup.
Next, doing market research is essential, so that you can determine the scope of your future consumers. After MVP, funding, and first sales, you might feel a need to raise more money or hire new people, but try not to rush into scaling prematurely. Assess the product/market fit carefully and make a plan before scaling.
There’s no guarantee for long-term success in any niche, but if you create something useful and pay attention to your customers’ needs, you’ll be on the right path to success.
Guest post courtesy of Tarun Reddy