It feels wonderful to run with the wind in your hair, carefree to all that is happening around you. The truth is life for adults isn’t that simple, especially for those who are just starting out. Success doesn’t magically happen overnight for entrepreneurs; neither do ideas miraculously turn into industry changers.
A lot of hard work and planning goes into the process.
For those who have brainstormed and come up with a killer idea, the race is not over. So, this is not the time to sit back, relax, and bask in the glory of success. According to the GEM Global Report, 100 million startups are created every year – competition couldn’t get tougher.
You need to implement the right practices to remain successful and not end up as a mere statistic.
Common Startup Mistakes All Entrepreneurs Make
In order for any business owner to strike it big, you need to be aware of some of the most common mistakes startups are making. With a boost in the right direction, you can avoid them altogether.
- Lack of experience in the line
- Lack of general and domain-specific business knowledge including finance, operations, and marketing
- Insufficient motivation, commitment, and passion for seeing the project through
- Inadequate leadership to manage the team and project efficiently
- Taking advice from the wrong people
- Going into the business with the wrong goals
- Absence of demand for the product or service
- Mismanagement of funds
Common Characteristics Startups Need to Succeed
On the flip side, once you know what not to do, you can focus on ways to keep your startup going in the right direction. Every entrepreneur feels he has a streak of good luck and won’t be one of the ones who fail.
To keep this feeling healthy and alive, here are ideas that you should implement to boost your chances of not only becoming successful but also staying in the lead.
1. Entrepreneurs Need to Talk to the users
The number one thing that you must do from the get-go is to keep in touch with your customers. You can’t invest time and money in something that no one wants. 42% of startups fail because they didn’t solve a market need.
Steve Blank, a top-tier entrepreneurial mastermind, developed a method to increase the success rate for startups. The solution entails the following: You need to talk to users. Listen to the feedback they give about your product or service.
Research is vital for the growth of your startup.
Do not focus on nice-to-have features. Customers want their problems solved as easily as possible.
Plans are essential but do not invest too much time putting your ideas on a business model canvas. You will only know how viable your startup is once you go out and test your ideas.
2. Assemble the right team
No matter how much ambition and passion entrepreneurs have for their startup, there will come a time when the long hours and demands of the business will become unbearable. Research proves that:
Solo founders take 3.6 times longer to outgrow the startup phase. A startup with a balanced team exhibits 2.9 times more user growth Therefore it’s advisable for founders to hire at least one person from the various departments necessary to run the startup.
Ideally, employ skilled and experienced personnel that can manage the startup triangle: a designer, engineer, and a marketer. However, in a startup, these roles and responsibilities will often overlap.
Starting off with the right people entails smooth sailing all the way through. And with their combined experience, you have a better shot at pulling out of any nose-dives that you may encounter along the way.
Each team member’s skills will complement one another, giving you a bigger chance of getting things right. Plus, you can push each other out of the comfort zone in order to aim higher. So as Mark Suster said, “Individuals don’t build great companies, teams do,” you need to avoid becoming a one-person team.
But while you hunt for people with the maximum talent, look for people who are as passionate about your startup as you are. They should possess the desire and ability to grow with your company. Capable employees can adapt to the fast-paced, ever-changing business environment.
Above all, you need adventurous, yet professional candidates who are willing to take calculated risks to achieve success.
3. Allocate a budget and stick to it
Money is vital for any startup. Whether entrepreneurs begin with their own capital or acquire funds through a loan, they’ll need to keep close tabs on everything even after your business takes off.
Avoid spending on ‘coffees’ with potential partners or investors, especially if there is no proof of extra revenue from the possible partnership. Most importantly, manage the marketing budget.
Paul Graham, a successful entrepreneur, highlighted three essentials for a good startup:
- Hire good people
- Make something customers actually want
- Spend as little money as possible
- Keep count of the costs and save up for future growth of your brand as well as any unexpected business expenses.
4. It’s all about the money for entrepreneurs
Even if you begin with all the plans in the world, there is no foreseeing what may happen once your startup gets off the ground. Even with the right commitment, understanding, and dedication, you need to generate income as soon as possible.
Cash flow is the stimulus of every business, especially for newly-established brands. Once income starts rolling in, it puts less pressure on the startup to excel. Given time and space, a startup has a chance to thrive.
Remember that if your product or service is too similar to ones available in the current market, it will be harder to gain a strong foothold. Something disruptive and unique with high demand has a better chance of surviving the competition, especially from those who have been around for much longer than you.
5. Be open to change
Startup teams must possess versatility and agility. And so you must be open to change. Studies show that those businesses that adapt to change are 92% more likely to be successful.
They possess the ability to change a product to meet consumer expectations, adjust the business with various compensation plans, take up a new marketing approach, or even rebrand the startup and start again. Teams that can recover from blows together can get through anything.
6. Implement technology
Most entrepreneurs have startups that are built with basic technologies. Shifting to cloud computing is an affordable option. It is one way that you can keep your startup agile in the long run. Plus it facilitates communication among employees and access to information from any location on any device.
One of the latest trends includes the incorporation of big data, allowing businesses storage within the cloud. And let’s not overlook the use of CRM or ERP software that can boost productivity in any enterprise.
7. Grow at a predictable, steady pace
Startups need to consider growth. Scaling up involves hiring more employees, seeking more capital, or enhancing the marketing strategy. Usually, it’s accompanied by more sales.
So you would think that rapid growth is a sign that your idea is hot in the market. This is good, right? But growing too fast, too soon can be detrimental to success.
The problem arises when scaling is intended to drive a startup’s growth. Premature scaling is responsible for most startup failures.
According to The Startup Genome Project, “Premature scaling happens when entrepreneurs start focusing on one dimension of the business and advancing it out of sync with the rest of the operation.”
You need to focus on getting a good product out to a stable market and knowing how you can consistently acquire new customers for less money than the revenue they bring in. You are ready to scale when your business model begins to repeat itself.
Final Thoughts For Entrepreneurs
Establishing a startup is like driving a brand new car. As you hit the gas pedal, your mind is busy controlling and steering. The exhilaration of speed pushes you forward. Yet, at the back of your mind, you’re worried about wrecking the new set of wheels.
But once you figure out the balance between risk and caution, the momentum that you’ve picked up can get you to exciting destinations. Now you need to manage the driving force that will take your startup to greater heights.