Updated 23 December 2016
When just starting up your business, it is not uncommon for start-up mistakes to be made, especially if this is your first company. After all, you are on somewhat of a learning adventure. If you make a mistake, you simply need to acknowledge where you have gone wrong and do your best to rectify the problem. Nevertheless, there are some common start-up errors that can cause huge problems for your business. These are the types of problems that you really need to try and avoid altogether. With that being said, read on to discover some of the common start-up errors that could kill your business.
Blindly following advice
When you first start a business, expect to receive advice from plenty of people who feel they know what you should be doing. There will be plenty of advice about starting your own business available online and in person but you should not simply take someone’s word for it, whether you know them personally or not. You need to be sceptical regarding who you believe has the capacity to help you. Moreover, the person you will talk to for help depends on the issue you are facing. For example, investor assistance is very different when compared to seeking help with employing staff for your new firm.
Trying to be all things to all types of people
One of the biggest mistakes that new business owners make is trying to be the ‘perfect’ business. They attempt to solve all of their clients’ pain points, and they try to offer a product or service that can cater to every requirement. In most cases, this is virtually impossible to achieve. Not only this, but you will dilute your brand identity if you attempt to be a ‘jack of all trades’. It is often better to choose something that has a strong sense of specialisation, direction and brand image.
Failing to listen to your customers
A business cannot exist without its customers. Not only is it crucial to listen to your customers in the beginning, but throughout your business life. You need to know what your customers think about your products, the service you provide, and your business as a whole. You are only going to be able to better your business if you genuinely know what people think of your product and what adaptions need to be made.
Hiring too quickly
Hiring too quickly can be an error because you end up with the wrong people in the wrong positions at your business. Nevertheless, this is a hard thing to manage. You want to get your company off and running as fast as possible, and a lengthy hiring process is going to get in the way of that. But, equally, you are going to reduce your chances of your business being a success. You need to know exactly what you are looking for, and you need to have a solid method in place for finding that person.
Selecting an unsuitable investor
You may discover a decrease in your cash reserves once your business begins to gain some traction. When in growth mode, you may need to raise outside capital. There is one important rule to keep in mind, and this is the fact that not all cash is equal. There are a whole range of different types of loans available and other ways to raise funds and all have advantages and disadvantages so scrutinise all potential deals to make sure they are 100 per cent suitable for your situation.
A lack of focus
In addition to the points that have already been mentioned above, a lack of focus is another error made frequently by start-ups and small businesses. A lot of people get distracted when they first launch a business, as there is so much to process and contend with. Things may start to get your attention and they may not be the focus of your core business, and consequently it is not advisable to waste a lot of time on such aspects in the beginning.
Spending too much
It is easy to spend too much money in the beginning because there are so many expenses. Luckily, there are not as many start-up owners that overspend as much as there used to be, as people have learnt from the lessons of others. However, it is important to note that there is a difference between spending too much money and not raising enough money. The best way to determine what applies to you is to simply compare your financial situation with other start-up owners to determine if you have spent excessively.
Failing to identify a target consumer base
This is a mistake that literally could cost you your business. You need to establish a consumer base that is going to be interested in your product or service, and you need to conduct a considerable amount of research to determine who the suitable customer is. Remember, this is not merely a theory. After all, if you do not understand your users, you are not going to be able to build a product or devise a service that is for them.
Launching too early
Another common error to avoid is launching your business too early. You no doubt have a launch date in mind. If your business is not ready, don’t push it. Launching a business too fast does kill businesses, as it can cause a lot of frustration and mean that your products are available on the market despite not being ready. Your reputation is on the line, and so you should only launch your business once you are 100 per cent ready.
Choosing a bad location
Last but not least, there are a lot of companies that do not succeed because they have not chosen the right area for their business to be based, Start-ups prosper in some places more than others. Make sure you conduct a considerable amount of research before you select somewhere for your business to be based.
All things considered, if you avoid the mistakes that have been mentioned above, you will give your start-up a much greater chance of success. Managing a start-up is never easy, but you can learn from those that have gone before you to ensure you don’t end up making any fatal errors that could ruin your business.