Fact: 90% of startups fail.
That is a sobering thought. Why do the majority of startups fail?
Here is a clue: it is not down to rotten luck.
No, it seems there are common mistakes that the majority of startups make. Even worse, not only are these mistakes held in common but involve the entrepreneur themselves.
If you are starting a startup don’t be your own worse enemy. It is not like riding a bicycle where you can expect to fall off. There is no need to learn from your own expensive mistakes, instead, it is better to learn from the expensive mistakes of others.
In this article, you will learn what they are and how to avoid them. Success starts now.
Perhaps you are waiting for Benjamin Franklin’s famous adage ‘by failing to prepare, you are preparing to fail.’ Of course, there is truth in this but ironically Benjamin Franklin illustrates one of the biggest mistakes you can make as a startup.
That is by trying to sell a product that people, basically, do not want. Research drawn from the owners of failed startups concluded that 42% of startups identified there was a lack of market need for their product.
In the case of Benjamin Franklin, his Photonic Alphabet crashed and burned before it even took off. He had the amazing idea of revolutionizing the English alphabet. What he didn’t account for was that no one had asked for it and no one was interested in it.
Rule number one. If you are going to sell a product, make sure you evidentially convinced people actually want it. This brings us back to Benjamin Franklin and his words of wisdom about preparation.
To quote another famous man (albeit less distinguished) Col. John ‘Hannibal’ Smith said: “I love it when a plan comes together.” Preferably before you start a business.
In fact, you can almost guarantee failure will follow if you do not plan sufficiently well. If you succeed then luck is shining on you and you should buy a lottery ticket on the way home.
There are no shortcuts to thorough planning and that is part of the point. Do not think about starting a startup without a highly detailed business plan. This should include all of your financials.
Your business plan is like a map and compass when at sea. Trying to navigate a formless waterscape is impossible without the right tools. The same is true starting a startup with very little experience behind you.
You need a destination, that should be ‘your ideal customer’ and your business plan is how you will get your product to them. Try not to view the planning stage as drag and something that is holding you back but rather it is the key to staying afloat in your new venture.
When you are planning your financials, make sure you understand the basic terminology and calculations. This blog post by inFlow is a helpful example.
Maybe accounts are not your strong point and you plan on using a bookkeeping service. There is nothing wrong with that in itself. However, the tendency is to concentrate more on what you ‘do’ than on the ‘business’ itself.
That is a big mistake. You need to make sure every aspect of your business is as important as every other aspect. You cannot get paid unless you send out your invoices.
Keeping up to date with the financial position of the business is a weekly if not a daily concern. It is not a once a month report from the accountant. Whatever happens, learn to stay close to the numbers within the business and you will do well.
In the late 1800s and up to the mid-1900’s you could see a one-man band on the streets of London and in Europe playing the drum with one leg, blowing the flute and playing the guitar almost all at the same time.
As entertaining as one man band once was, it is a thing of the past. Musical taste, entertainment, and technology have all moved on.
Just because you are starting a startup and perhaps cash flow is limited, does not mean you have to be a one-man band. In fact, to try and be a one-man band is a big mistake.
Get the help you need and when you need it. Technology and the internet have completely changed the face of doing business. Now, you can access the state of the art applications and web-based tools to help you operate your business efficiently and profitably.
Many of these tools are developed with small businesses in mind and so that means for a low-cost subscription you can access the right set of digital tools for your business. It does not have to be expensive and the advantage is that you can scale up your use of these tools as your business grows.
In this article, you have read about some of the big mistakes failed startups make. If you are starting a startup, make sure you imitate success and not a failure.
Developing a network of support with others and developing your business relationships through a network is a smart move. There are many ways you can do this.
Member since: 26th November 2018
Having enriching experience in the world of digital marketing, I have created a niche for myself in the industry. The primary focus lies in writing, blogs, articles and different stuff that help businesses...