25 Nov 2020, 10:00 — 6 min read
Starting a business is by no means easy. There are myriad decisions to make, and uncertainty at almost every turn. Many entrepreneurs have little prior experience with what it takes to run a successful business. Even though they may have an incredible idea, complex problems may arise along the way.
While there isn't a fool-proof plan for success, here are some Startup mistakes to avoid to significantly increase chances for success.
Planning may seem tedious, but having a solid plan plays a vital role in determining future success. Every business must have a business, financial and marketing plan.
A comprehensive business plan should address questions such as: What is the goal of the business? Who are the potential customers? What are its mission and values? What is the growth plan for the company? What is the marketing plan? How will the business sustain itself financially? Who are the competitors and what are they doing? How can the business measure success?
A short and long-term plan with measurable goals helps to steer the business on the right course.
A product or service needs to deliver value and must be better or different from competitors. This is what will drive potential customers to purchase or switch loyalties. Market research indicates that a product needs to be at least ten times better, faster, or cheaper to truly stand out amidst the competition and be a success. So, if an offering is just a little better, a little different or does not add significant value, some re-thinking is required.
Most successful businesses know exactly who their customers are. The advantage of knowing one’s customers is that one can define the size of the target audience. The success of a marketing campaign depends largely on how well a business understands its customers. In depth market research is required to identify the target audience, where one can reach them and how they will respond to marketing activities.
Technology not only provides new opportunities for small business owners, but also provides a level playing field with larger counterparts. Moreover, it helps to increase efficiency and conserve resources. Adopting new technology may seem daunting, and requires time investment, but a reluctance to do so can hinder business growth.
Also read: Technology and business trends in 2020
Starting a business does not necessarily require huge investment, but some Startups spend huge, unrequired amounts on personnel, marketing, equipment, and software. With some research, it is easy to get all marketing and operational needs met at less expensive (and equally good) rates. Creating and sticking to a budget is vital to avoid unnecessary overspending and an eventual cash burnout.
At the other end of the spectrum, some Startup founders do not spend on areas that are required for a business to grow. While it is possible to start a business with limited funds, the only way to grow it and make it a success is by investing an adequate amount of capital where required.
Also read: 9 modes of funding for your startup
Establishing a business is challenging and often takes more than one person to launch. There are decisions to make, products to market, funds to raise, and a host of other tasks that few can undertake alone. To deal with the highs and lows of entrepreneurship, another person's encouragement can be invaluable. A little help from friends or business partner(s) can really help to smoothly launch and grow a Startup.
Smart entrepreneurs test their solutions on an on-going basis and accordingly pivot. The Covid-19 pandemic, for instance, has compelled many entrepreneurs to test their business viability and adapt their offerings to evolving market conditions. A Startup needs to be agile enough to quickly respond to business-environment changes. Without this adjustability, it risks failure.
Small businesses need sales to survive and must set profitability as a near-term target. Steady and increasing sales are vital to cover costs, reinvest in the business, and distribute profits to owners. Keeping an eye on expenses is also crucial. A business may have high sales but if expenses are not under control, profits will be hard to come by. This will lead to an unsustainable business.
A great idea is of little value unless it is turned into an actionable plan and executed effectively. Several Startups fail due to bad execution. As American entrepreneur Sam Altman sums it up, “Ideas by themselves are not worth anything, only executing well is what creates value”. He further states, “Execution gets divided into two key questions: 1) Can you figure out what to do? and 2) Can you get it done?”
Also read: The big business potential
Share with us your insights on the mistakes that you think Startups should avoid to advance on a winning trajectory.
Image source: shutterstock.com
Posted byGlobalLinker Staff
We are a team of experienced industry professionals committed to sharing our knowledge and skills with small & medium enterprises.
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