Top 4 Startup Mistakes that Will Destroy Your Business
Startup mistakes are very common for the inexperienced people. However, that should not be a reason for you to give up on your dreams. Depending on which country you are located, the first place, I would go is the Chamber of Commerce.
They have highly qualified staff ready to answer your question. I would prepare the list of question before hand. I would recommend to start with the market research before anything else.
The aim of this article is to give you an idea, what are the most common mistakes. Even though we know about them, yet we still make similar mistakes.
Building A Product or Service Nobody Wants
One of the first very common startup mistakes is to build a product or service that nobody wants. The best way is to start with market research. This means that you have to go on the internet where pretty much everything is available and start from there.
Definition of Market Research: The market research is the very dynamic process behind researching gathering and analyzing market data. The market research gives insights information about a product a product/service already available on the market. The data is mainly about, prices, spending habits, target market, locations etc.
A market research is divided into two types:
- Primary information research. There are two main options here. You gather the research yourself or higher a company to do the research for you. If you decide to go and do the research yourself use this list of tools.
- Secondary information research. This type of research delivers compiled information organized and easy to understand. Some examples would be the reports and studies by government agencies.
Why would you invest money into a research report?
Spending money for a comprehensive report is absolutely crucial. You cannot go out and build a business without knowing crucial data about, for instance, who is your customer?
Believe it or not many of the startup mistakes are related to the market research. Regardless, all of the information and tips available on the internet, people will still do the same mistakes.
Hiring Poorly is the second Startup Mistake
I have personally managed few businesses over my career as an entrepreneur. The second very common mistake is to hire somebody who cannot do the job or you cannot work with.
Companies for example, invest millions in separate HR departments and their goal is to hire the right person for the right role.
The hiring process takes time and effort, which involves huge costs behind. Unless, you already have huge budget in hands, your hiring process should be done by you or a freelancers.
If you are willing to take the hiring process in your own hands, please read this guide so you could avoid at least these startup mistakes.
Lack of Focus
A lack of focus and orientation is very common thing even for experienced entrepreneurs. However, the most important thing is to always revise your strategy and plan for success not a failure.
You should always be involved into important decisions. You should always measure the risks and also write them down, so you could clearly see and understand the situation. Most of the time reality looks different in our heads than on paper.
I always lose my focus when, I get too busy and start to care less and less about what is happening to my business.
In order to stay fresh and sharp, take breaks and break down your work load evenly.
Please, do not try to do many things in the same time. Multitasking is very clear recipe for failure. The most important is to seek an advice after you complete a given task. There is nothing to be ashamed if you ask for extra pair of eyes to scan your work. This is your error trapping process and it is effective practice.
Failure to execute your startup Marketing and Sales Strategy
When it comes to marketing and sales strategy it is important to follow your initial marketing and sales plan. Believe it or not even experienced people can do that kind of startup mistakes.
I have personally observed a business that clearly did not follow strict rules of sales strategy. The business was into the food industry. Most of the work was done by the owner, who did not have the time to focus on the important things or simply just became very ignorant about the important things.
Example, of Startup Mistakes
The owner of the business was preparing the food menu using expensive ingredients. The food was targeted to primary school pupils. This is very tricky and dangerous audience. You get it wrong once and you are out of business.
This particular business failed due to the sales strategy. I would like to explain more into details so you could understand, what went wrong.
As I have mentioned the business sells food to the primary school pupils. There was something wrong with the menu itself. The menu required high budget for the preparation.
The price was too low in this case. However, the price was wrong because of the wrong understanding of the market.
The competitors were not understood correctly. The competitors had already low price. They also had low cost ingredients allowing them high margins.
The business in question that failed, did not take the marketing research into consideration. You simply cannot sell the food more expensive than the competitors as the customers won’t come to buy. Obviously, in this case the business was selling the food to low causing damages in the margins. As a result, the business was not profitable once you deduct all of the expenses.
In this case the target audience and the competitors will dictate the price strategy. You should, already know how much your customer is willing to pay for your product.The food cannot be sold too high, as the competition will steal your customers.
You cannot go too low as you will be making no profit. Without a profit, you will be out of business within days.
The best thing is to see what the competition is doing already. Study and understand their activities. After, pay attention to the customer data. Then combine it all together and determine the price for your product leaving good gap for the margins.
Overall, running a business is not an easy task as you might think. There a lot of things that need to be taken under consideration before starting. After the business is started, the business needs to follow solid business plan. There are risks in every business and the risks come, when you are not sure about the details.
If you are sure about the details. You might expect less problems.
It seems very at first time, when you think about business.Once you have the details, then it becomes complicated to comprehend and manage. However, people still do the same common mistakes over and over. The most important is to learn from the mistakes and not repeat. It is unavoidable to make mistakes. The idea is to have full control of your mistakes and address them accordingly.
Advice: Be imaginative, set no limits, have fun along the way!
The owner and PM of Techinfographics.com. Dimitar is young entrepreneur who is into technology and innovation. He is an investor and key figure into several other online projects. He travels and writes about technology and business.