Biggest Mistakes a Startup Can Make
Establishing yourself in the startup world is risky business, but interestingly, most of the problems that cause companies to go under are usually avoidable. Being able to recognise a mistake before you make it can separate you from a majority of startups, who often make similar errors. This article will show you how.
1. Insufficiently researching the target market: Casual knowledge about the market you’re selling to isn’t going to cut it–creating a successful company requires painstaking research on your target market; it helps you narrow down on the customers you want to reach out to and subsequently focus your energy and resources on a well-defined area rather than trying to target everyone. Target marketing is a more affordable, efficient strategy, one that helps you market yourself better and generate business faster.
2. Not knowing your ideal customer: A successful company thrives on the knowledge of their perfect customer. Here, you need to adequately research the market in order to recognise the type of customers you’re trying to sell to, where you can find them and what their response to your product or service will be.
3. Focusing on short term targets instead of your long term goal: Identifying and working towards your long term goal is a must in order to establish sustainable growth and a long future for your company. Planning and prioritising how your short term aims fit into your journey towards the bigger picture, developing a reward system for yourself and having faith in your ideas is a good way to stay focused on what really matters to you.
4. Being hasty with your business plan: Your business plan serves as an outline for your company and its future. Therefore, it needs to include every last detail, from your management team to your marketing strategy. Planning in advance will help you identify if you’re on the right track towards making the money you have projected. A business plan is also necessary when asking the bank or your investors for money. It also helps you be realistic and careful when planning future strategies.
5. Seeking commercial fame before your product is ready: Seeking publicity before your concept has a strong foundation is a crucial mistake to avoid. Early publicity can bring opportunities your way that you may not be ready to incorporate yet, as well as build premature hype that you may not be able to deliver on. It’s best to wait until you’re sure about where your company stands before attempting to advertise your idea.
6. Not knowing your funding requirements: Misunderstanding your financial situation can lead to disaster down the road. Being realistic about the valuation of your company and the funds it requires to grow is the first step towards financial stability and profit. Knowing when and how to secure your funding, and from whom, can save you serious trouble later on.
7. Not listening to the customer: The age old business mantra ‘customer is king’ persists for a reason. Your company’s success is largely dependent on your customers, and incorporating their suggestions or wants into your plans is a must if you want your company to do well. Figuring things out on your own seems more tempting, but many entrepreneurs have begun regularly interviewing their customers, both to hear new ideas as well as valuable advice that helps their companies adapt and grow faster.
8. Undervaluing your product or service: Fear of failure or lack of confidence can unknowingly make you sell your product short. This not only weakens the authenticity your idea brings to the table but also makes way for feelings of bitterness or frustration. A good way to avoid this would be to thoroughly research your market so that you can know which price entry point you want to start selling at.
Although there are many startups who recover from their mistakes, it’s always safest to eliminate error, especially when you know exactly what to avoid.