Starting a new business is always quite tricky. If you are starting your first company, you may have difficulty understanding even the basics. What industry should you be in? What product should you sell? What kind of customers can you target? How are the competitors doing?
These questions can cause stress and anxiety for the aspiring entrepreneur — especially given a large number of failed startups. And while starting a business from scratch is indeed scary, it shouldn’t stop you. You can learn from the failures of other entrepreneurs to notice and prevent common mistakes before they affect your company.
Unfortunately, many young businesses fail to survive. Every startup goes through a difficult phase initially and can even fall entirely before becoming very successful.
You can avoid some common mistakes if you pay attention to the reasons for other people’s failures.
Creating a product that no one wants
Yes, this happens. If there’s no demand for your product on the market, there’s nothing you can do about it. You will only be wasting effort, time, money, and resources. After you bring a new product to market, people will ignore you and your product.
An incompetent team
Selecting a good team is especially important in the early days after you open your startup. You are very likely to delay your startup if your employees are incompetent. Never try to save money by hiring questionable professionals-even if you think you can change or train them.
Lack of focus
Lack of dedication happens too! If you’re very involved in your business, it’s only natural for you to be distracted. Startup founders often deal with too many issues instead of focusing entirely on specific problems for too many people.
Lack of co-founders
People often think it’s okay to run a company on their own. Many people believe that a co-founder will only be a source of unnecessary problems. In reality, however, a partner can take over some complex tasks, making your job much easier.
Refusing to change your business model
Many startups don’t want to change their business model. They are too attached to their original ideas. Don’t think that changing your business model will reduce your chances of survival. Of course, you shouldn’t do it too often and rashly, but sometimes such a step is just necessary for a startup’s survival.
Choosing a highly competitive market
A highly competitive market looks tempting and attractive because many other companies are already making money and have many potential customers. Unfortunately, it also means that the more prominent players may crush your minimal startup capital.
WHAT YOU CAN LEARN FROM THESE MISTAKES
The above mistakes teach you:
Be patient and take the time to create new ventures or change strategies.
Analyze problems thoroughly. You can always learn something useful for yourself from other people’s failures.
Honestly, measure your performance.
We are not making the same mistakes over and over again.
Receive feedback from customers.
So, we’ve explored the main reasons why startups fail. Now let’s look at the warning signs and solutions to the main problems.
WARNING SIGNS YOU SHOULD BE AWARE OF
Don’t ignore these warning signs that can lead to startup failure. At this point, you still have a chance to fix the problems and avoid trouble.
Team of perfectionists
What’s wrong with perfectionists, you may ask? It would help if you did not assume that the best team should consist of perfect people and specialists. You should find a balance. Unfortunately, excellent employees don’t exist — if someone aspires to be one, they probably won’t achieve anything. Hire people who don’t desire perfectionism but are set up to get things done.
Unsuitable Co-Founder
It’s not enough to find a co-founder. You need someone who shares your values, complements your skills, and is willing to work days on end for your business to thrive.
The team is too big
If your startup has more employees than customers, you could go under at any time. No company benefits from a massive team with no customers. That can be one of the most significant warning signs.
Too much reliance on paid ads
You are very close to failure if you think that the only way to market is through paid advertising. This conception is a mistaken belief. Try to learn more about organic marketing methods such as content marketing or influencer marketing.
We are changing courses all the time
As noted above, you shouldn’t be afraid to change your startup course. After all, you are running a company, not a car! However, keep in mind that you should only do this at the right time, not regularly.
MAKING CHANGES TO YOUR STRATEGY
We can’t stress enough how important it is to develop the right strategy before opening your startup. Let’s look at what you need to do to plan and execute the right strategy and avoid failure.
Do your research
As stated earlier, creating a product that no one wants is a complete disaster. Do proper market research to find out if anyone is interested in your product. If the product solves your potential customers’ problems, it is more likely to be successful.
Hire people who will complement each other
It would be best if you strived to build a balanced team, not hire perfectionists. If you hire smart people, they are more likely to fail to work effectively as a team with each other.
Carve out time to relax
Don’t spend too much time in the office. Get some fresh air or take a vacation to let your mind relax a bit from the daily grind. This arrangement will help you focus better on your essential work.
CONCLUSION
If your startups have never failed yet, it means that you haven’t been out of your comfort zone.
Credits to Web-студия Внешний{Код}. (n.d.). Почему проваливаются стартапы и как этого избежать. [online] Available at: https://outcode.ru/blog/pochemu-provalivayutsya-startapy-i-kak-etogo-izbezhat [Accessed 18 Aug. 2021].
