There is no text book as such to run a startup in the right way. Founding and running a startup successfully is not easy.
Almost 9 out of 10 startups don’t make it past the 5 year mark.
After conducting numerous researches, they state that experienced entrepreneurs are 3x more likely to succeed with a new startup than an inexperienced founder.
Below are some of the common mistakes startups make. Read carefully to not make the same mistakes!
1. Stop hiring the wrong people:
When your startup is new, it is essential that you hire the right people for the right role.
You can’t afford to waste time and money on someone who is not efficient.
This doesn’t mean they are useless. You can’t judge a fish by its ability to climb a tree.
You need to hire people who match your passion and their mindset should align with the long term goals of your company.
2. Stop assuming that you know your customers:
When was the last time you sent out a survey to your customers? Or did a poll? Or even talked to one of them?
If you don’t remember doing any of these, you’re in deep trouble.
You should understand that a customer is the king. You should give them what they want. Hence, it is very important to understand what exactly they want.
3. Don’t waste money on things you don’t need:
This also applies to your personal life and not just startups!
You don’t need a big swanky office in a prime area right now. Don’t compare your startup with other startups that have a foosball table or free lunches.
All those things are cool when you can afford it. Offering them too soon could end your startup even before it takes off.
4. Don’t try to serve everyone:
Don’t empty your plate by trying to serve everyone because you won’t have anything to eat then.
Your target market is not everyone. So don’t try to be everywhere trying to solve everything for everyone.
Concentrate on your target audience and cater only to their needs first. Once you know who your product is for, it becomes easier to market it to them.
When you market the product to the right people, the chances of boosting up your sales is also higher.
5. Stop raising capital if it is not working out:
If you are trying to raise capital for your company, make sure you are confident about your ideas.
Investors will invest in your company once or maximum twice if there is no consistency.
If they lose money multiple times, you will end up having a bad reputation in the market. This can also affect getting funds in the future.
6. Raising very less capital:
Most of the startups take funding at some point. They won’t have much runway left and they’ll need some extra funding to take off.
Raising very less capital = Too less money = Unsuccessful take off.
So if you take money from investors, you should take enough money to get to the next level.
7. Things you think your startup needs but not immediately:
Here is a list of things you need but not immediately:
- A good location
- A CFO
- A Receptionist
- Many employees
- An HR department
- A conference room
- Policies for everything.
8. Stop having unnecessary meetings:
A study by Clarizen in 2015 found that 46% of employees would rather do something else rather than sit in a meeting.
Some of the things they said they would rather do included having a root canal, watch paint dry or move to Antarctica.
Fun fact: Most of the employees spend longer time preparing for a meeting than actually attending a meeting.
9. Slowness in launching:
Several problems could be the reasons for slowness in launching.
Some of them are:
- Working too slowly
- Fear of dealing with clients
- Fear of being judged
- Working on too many things
It is important to not be very slow as this could send a bad message to the investors. Hence, it is essential to face all the odds and come out of that zone.
10. Poor investment management:
Money is like the fuel that is used to take the business forward. If you don’t manage money properly, then you cannot take your business forward.
Hence, it is very important to manage your investors. If you don’t allocate your funds properly, raising funds will be difficult in the future.
When you’re starting out, you could be confused. You would want to make it big in a short span of time. But rushing too fast can backfire too.
So make sure you note down the points mentioned above to avoid any hiccups in your business.
So these are the 10 things You Shouldn’t do in a startup. Hope you liked the article. ☺
If you find difficulties in making a business plan then please read our this post – How to make a Business Plan ?