Becoming an entrepreneur is a lifelong dream for many, after all being their own boss and working on something that they really love is what everyone dreams off at some point in their lives. However, according to the data published by fortune.com 9 out of 10 start-ups fail. Every business is unique hence the challenges that they face would be unique too, however, we have rounded up 10 biggest mistakes that the start-ups make that needs to be avoided at all cost.
#1 Always Know Your Market:
Coming up with a new idea for a start-up is not just a concept but is the most essential aspect of a business. However, just because a product is unique and different doesn’t necessarily mean that there is a market for that product. It is very important that a thorough market research is carried out in order to determine whether there is a market for your product or not.
#2 Keep Track of your Capital:
For the start-ups, one of the biggest challenges they face is always the financial management. The belief that the start-ups have is that if they can get the business up and running they can continue further with the revenue that they generate. This is not always the case and sometimes it may take more time for the cash flow to come to an expected level and if the start-ups do not have enough capital they will find it almost impossible to run their business. Being a start-up means that the ability to acquire capital through short-term loans from financial institutions is almost impossible.
#3 Know Your Competitors:
For a start-up to compete with a company which is very well established and has a major market share is almost next to impossible. Many start-ups fail because they think they can go toe to toe with these industry giants. It is always important to know that these companies have built a reputation for many years and that is what a start-up must focus on, building a reputation, creating brand value so that they can start to acquire market share and do what they are good at doing rather than competing directly with bigger companies.
#4 Marketing is the key:
Marketing is one tool that can make or break a company. Companies with mediocre products and services can achieve greater things by developing and implementing a good marketing strategy. Start-ups usually make the mistake of being too much product and service driven rather than focussing on marketing aspects of the business. A good marketing strategy will not just communicate information regarding the products and services but also helps build brand image, create brand loyalty, and help companies achieve their overall aims, goals, objectives, along with corporate mission and vision.
#5 Don’t Stop Innovating:
One of the common mistakes o a start-up is to think that having a good idea is enough to become successful. Companies like Apple and Microsoft didn’t become successful with one idea. They keep innovating and that is where most start-ups fail, not able to keep up the innovation leads to a disaster. In the age of technology re-innovating as a company is the only way to stay current and in the lead.
#6 Have the right team:
When ideas are formed and implemented, the reason it becomes successful is because there is a group of people who know what the common goal is and all work towards it at all times. However, if the team composition is not right then it becomes very difficult to achieve the established objectives. Always have a team of members who are good at what they do and complement each other to achieve a uniform objective.
#7 Understand the Legal Challenges:
In the beginning, start-ups are so focused on what they have and what they want to achieve that they fail to understand the legal aspects that govern the market that they are working in. Legal challenges regarding the market, competition and the business must be carefully analysed and accounted for before beginning the business itself. Having legal experts within the team or consulting law firms is always a good idea. Failing to do so would end up in legal battles that may bring the entire business crashing down.
#8 Never Ignore Customer Feedbacks:
Customers are the ones who could make or break the business. They are the ones who decide whether what you are offering is deemed worthy or not. It is always important to listen to what customers have to say and what they are expecting. Listening to them helps the companies to re-innovate, grow and become better at what they are doing. No business can be successful with just one-way communication and hence collecting feedbacks and responses from the customers becomes as important as any other strategy that a start-up could develop.
#9 Choose your Location Wisely:
A good business in bad location could end up being simply a bad business. Not just knowing the market or having a great team but also knowing where the business must operate from is also very essential for a start-up. Keeping up appearances is important when there is a need for you to show your work to the potential customers. Chances are if they don’t like the location, they may not come back to buy or use the products/services that you offer.
#10 Have Experienced Advisors:
Usually start-ups are started by youngsters who have a great idea or a vision, however, in most cases they lack experience. When there is no experience it becomes difficult to get out of a difficult situation. This is why it is always important to have an experienced advisor who could overlook the business and give feedbacks. Even bigger companies have advisory board members to lead them in the right direction by making use of their vast experience and knowledge in the field. Challenge for start-ups is to decide who can fulfil such a role considering the limitations that the start-ups have in terms of capital and long-term commitments.
Start-ups need to perform market analysis, industry analysis and know its own strengths and weakness to determine where they stand, what they can achieve and how they can keep relevant in an ever-changing world. Only when they avoid all the mistakes mentioned they can become successful and stay for a long haul