10 Business Mistakes Made By Lots of Startups
Startups come and startups go. The competition for new businesses is fierce, and one misstep can cost an entrepreneur more than just money. So for the sake of making dreams become realities with life spans that rival those of their creators, here is a list of 10 Business mistakes that are painfully common among startups but are also easy to avoid.
1. Failure to Plan Ahead
Don’t let your passion lead you blindly; even Romeo and Juliet had a plan. And while some might say this lovelorn couple is also proof that a plan alone does not a happy ever after make, imagine the mess that would have ensued if Romeo had simply slipped into the night without letting Juliet know he would be keeping in touch.
A plan is the first thing a startup should have. It should have nothing else but a spark, the ignition of an idea, and the plan: the actions taken by which the idea will become a lucrative and successful business venture.
Being an ideas person is romantic and fun, but without serious consideration of all aspects required to follow through on an idea, there will be no business success.
2. Hosting Amateur Hour in the Accounting Office
One of these things is not like the other: A business owner, a startup entrepreneur, and an accountant. Don’t be fooled into thinking that a new business needs time on its feet before it needs someone to handle its finances. There are a host of good online accounting schools, finding someone who has graduated from one to operate a company’s business office is absolutely invaluable.
3. Offering Low, Low Prices!
This is a common mistake, so don’t feel too bad for making it. The simple explanation is this: sales are not always equal to success. Lots of new company’s walk onto the market with the idea that if they offer their product more cheaply than their competition, they will earn more business and thus be more successful. It’s not always easy to see why this doesn’t work (refer to suggestion #2 for detailed explanations) but suffice it to say: large retailers like Amazon offer price gouging discounts that your startup cannot and should not offer, because they have immense buying power. They pay less than what a small company pays because they buy more.
For a startup, offering goods or services at prices that are too low, actually has a negative impact on business, not just because its an unaffordable practice. So ask a fair price, regardless of the good or service being offered.
4. Mismanaging Opportunities to Market
Marketing should be at the top of the priority list for any new startup. Not just business cards or bulk baseball caps emblazoned with the company logo. Commercials and print ads are still the best way to reach consumers of goods and services, so figuring out a solid marketing campaign that includes these elements is necessary to startup success.
5. Dreaming Small
There is no dream too big, only too small. Aiming low when designing a startup is the equivalent of throwing a basketball at a hoop and hoping to make only one point. Always go for three when it’s possible because even if you aim low you could miss.
6. Believing Good Employees Grow on Trees
There is no money tree and there is no good employee tree. Good employees are created, nurtured, and embraced. Finding loyal workers with flexibility who are eager to learn is not as hard as it sounds, but it will seem hard if the wrong attitude towards employees is embraced from the get go. Make sure all the people in charge know the chain of command, feel respected, and properly compensated, and then make sure they make the people who work under them feel the same way.
7. The Helen of Troy delusion
As beautiful and desirable as any dream may be to its dreamer, the maxim that beauty is in the eye of the beholder should always be recalled and embraced by the startup entrepreneur. Not everyone will want to fight a seven-year war for the same dream. Neither will every consumer be as delighted and star struck by a brainchild as its conceiver may be. Not forgetting this will provide perspective at all times.
8. Lacking Location
Etsy is a popular marketplace website for multiple reasons, but its popular amongst vendors because it allows them to procure something necessary for their business to operate: a location.
Do not be fooled into thinking that a startup doesn’t need a home, or that location isn’t important. It is crucial.
If all the business takes place on the web, then the website is the location, and ensuring that it is accessible and interesting and easy to find, is highly recommended.
9. Founding Party of One
(See Suggestion #7)
If you are the only person whose passions are aroused by your business proposal, you should not quit your day job.
10. Stubbornly Resisting the Need to Change
If the chocolate and bacon craze that drove your confectionary company to local fame has died down to a murmur, don’t let the company go down with it. Find the latest trend in sugary sweets, and stay on the cutting edge of the competition. This holds true with any company: resist change and die, remain flexible and thrive.