The failure rate of startups is extremely high, situating itself at around 90%. However, you can prevent the failure of your own cherished startup if you know about the common mistakes other business owners that lack knowledge make. Learning from other people’s mistakes will give you a huge advantage, and if you want to know what NOT to do, keep reading!
Running out of money
So, you decided to finally open an online store of your own. What now? It is unarguable that to start a business, you will need some sort of money. Expenses can pile up in an exponential way, and you should be ready for that. I will now tell you about some of the more common types of expenses you probably won’t be able to avoid: - Technological expenses, such as the cost of setting up a website as well as accounting software. - Advertising expenses: you will need them to make your brand seen by new people. - Equipment and supplies expenses: Like a new computer, or some equipment your team of employees might need - Employee expenses: If you want your employees to be happy and keep working for you, of course you will need to pay them These are only a few of the expenses a business brings along, there can be many more if you are not smart about your budget, business plan or the legal standing of your company! Another super important thing to note is that you must have some extra money set aside for emergency purposes!
Lack of market need
Market need is what will keep your business running, and on the other hand, a lack of market need is what will prevent it from becoming successful, so it’s super important to have enough demand! Ask yourself this: is your product solving an actual problem for a big enough target audience? Think about it very well before answering, because this is what will impact your business in the biggest way. No demand = No sales! So, focus on your target audience. Think about what type of people they are, what are their likes and interests, how can you hook them? Simply put yourself in their shoes! Also think about whether there is enough of them to make some actual sales.
Competition
A common reason for startups to fail is quite unfortunate, and that reason is competition. Now a days, the business market is so saturated, almost every other person has started a business! This is why oftentimes, there are companies that sell products similar to yours, or companies with a similar brand philosophy to yours. Whatever it be, there will almost always be companies that are somewhat similar to your startup. Some of them might even be more established than your own business. For that reason, show everyone how different your products are, show them how superior they are, how unique and amazing they are! Also, start building a great relationship with your customers and buyers from the very start. Not many companies have such a great customer service policy, even huge companies such as Amazon have had many complaints in the past years. So, make sure that the customer support system you put in place is top-notch and that your customers feel loved and appreciated.
Legal challenges
Legal problems are what can completely destroy a starting business that is trying to get more recognition. However, you should not be afraid since a lot of legal mistakes can be effectively avoided. As your team of employees grows, if a problem related to employment laws arises, it will be more substantial if your team is huge. Having the right idea of employment laws from the start will help you avoid more problems with your bigger team of employees in the future. If you don’t feel confident in your understanding on this topic, it will be better if you contact a lawyer that will help you establish whether you are following the laws correctly or not at an early stage! In any way, having a reliable lawyer for your business is always a good idea at any stage. You should also ensure that you have written contracts and agreements in place. Verbal communication is not enough, since you cannot prove that a certain conversation happened and that it led to a certain agreement if you do not have physical, written proof. If a legal problem leads you to court, it will be a relief to know that you have all the written agreements and contracts that prove any consensus you had with either your employees, another company, or a supplier. Having the right documentation will save your business in the event of a trial!
Lack of marketing
One of my favorite phrases is the following: “Never stop marketing - No marketing, no sales!”. Marketing is a vital aspect for businesses of any sizes, but especially startups which have not yet established themselves in the business world. It helps you attract customers and make your startup get discovered by more people. There is absolutely no other way to make your business known! Of course, marketing involves some additional costs, but it is a crucial expense.
Fear of change or too much change
There are times where startup owners are in love with their product and so focused on its positive aspects that they don’t see the changes they could make to improve it. Of course, you should stay consistent in your marketing and in your brand, but change is not necessarily a bad thing. Change is what brings innovation and progress. However, before taking a decision in making a change make sure that it will not change your brand’s overall presence. Your brand should stay your brand, and not become something entirely different! If you overdo change, and your brand turns upside-down, you will most-likely need to re-start your marketing from scratch, which means that all the money you spent on marketing before will be a waste!
Lack of Focus and Motivation
Once you create your startup, make sure to stay focused on your end goal. Whatever you do, please just to not give up on your business! There could be an increase of sales coming at any possible moment, so long as you keep doing your marketing, growing your brand’s presence on the various types of media and making sure your product is unique. There might be an important client planning on contacting you, but if you have already given up and closed your business, they will never get the chance to reach out to you.
Poor Customer Service
I understand that as a startup owner, you already have so many things to worry about besides customer service. However, slacking on customer services is a very bad idea. You want to be remembered as an accountable, responsible, and helpful business. Do not ruin your reputation by not being there for your customers! After all, your own reputation depends on their opinions! So, make sure to have proper customer support services in place
Burnout
Creating your own startup can be difficult, and can unfortunately have some negative effects on your mental health as well as lead to burnout. The effects of burnout can ruin your already fragile startup business completely. It is understandable that as a new business owner you want to get the biggest number of things done in the limited number of available hours in a day. However, if you lead yourself to burnout by overworking, you will encounter many negative effects. First of all, you will notice a decrease in productivity and motivation. Getting an enormous amount of work completed in one day is worth nothing if the day after that you can’t bring yourself to do anything! You might even lead yourself to depression, anxiety, and other mental health issues. Finally, burnout will make you less creative and innovative. So, take care of yourself, and do not forget to be a human who enjoys living life and having fun!
To conclude, now that you have read this article, you are way better prepared to open your very own startup. Remember what NOT to do, and do not repeat other people’s mistakes! That way, your business will start flourishing in no time!
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