‘Money can solve anything’- this is the first thought that comes to the mind of most of the startup founders. The startup founders live in the biggest myth of life that, once they have funds for the business, their startup will automatically run. This is the biggest lie and one of the common mistakes that startup founders make and that has ruined many great startup plans. The seed funding is the first step in the path of a successful startup, but never assume it as a final destination, because the road is very long after this. Launching a new startup is like a raising baby. After the launch of the startup, comes the biggest responsibility. You need to plan the whole life of your baby and provide everything to them. So just like it, after getting the initial investment, planning and using it properly to boost the startup is important
When you are beginning with your startups, with all your excitement and passion, the only thing that you want to concentrate on is how to become successful. You do every possible thing to achieve your dreams but being an entrepreneur is not an easy job. One needs to burn their midnight oil for that. While being an entrepreneur, there are mistakes one can make which may disrupt the process of reaching the top.
Numerous startup founders fail to manage it after the seeding step, as they had utilized their all energy in getting the funding. The startups usually fail because they fail to deliver their promises and fail to manage their team. These are the two major reasons behind the downfall of many startups. However, they are not only mistakes made by the startup founders, there are many other common mistakes that startup founders make in the bucket. I have rounded up a few mistakes that you need to avoid at any cost to be successful. In this article, we will talk about the Common mistakes that Startup Founders make in their businesses.
Overthinking and Underthinking
Forgetting About Bookkeeping
Overthinking and Underthinking
Thoughts should be big and the start should be small. Overthinking in terms of business may affect the revenue and process of work, plus it doesn't help you in reaching a conclusion or solution to your problem. Instead, it leads to the creation of problems that are not even there in reality. Decisions should not be risky and should be taken after thinking and evaluating the entire situation properly but too much overthinking can lead to a missed opportunity.
On the other hand, underthinking any situation is also one of the main causes that may affect the business. One needs to dwell deeper, when there is a need, rational thinking is needed so that effective leadership can be formed.
“Take time to deliberate, but when the time for action comes, stop thinking and go in" – Napoléon Bonaparte
In terms of startups and new entrepreneurs, investment is quite a big concern. Be aware of your expenses and savings. Higher Investments in a product without assuming the demand may damage the economy. Investments should be made after analysing the demand for the product.
Everything needs a plan, especially when you are starting a new business, planning becomes mandatory. The plan will guide you through every stage, it is like the GPS that will take you to your ultimate destination. However, wrong planning can create havoc in your dream business. Rough ideas for saving money should not be encouraged, it can cost you your dreams. Pre-planning for saving money should be made keeping the situation in mind be aware of your target audience and concentrate on making products and services according to them.
Estimations of cost should be appropriate. Underestimating the order for developing the business may lead to loss of money and affect the financial state of the company. Thoughts should be appropriate to the situations which include time, surroundings and environment of the market. Always estimate the value higher than that of the original price to keep any sudden expenses in check.
While taking decisions entrepreneurs should take care of the situations they face. One wrong decision can lead to the death of your dream startup. The decision should not be risky and made at the right time. Taking risky decisions at the beginning stage should be avoided in order for better growth.
The hiring of the staff should be less during the initial stages. A huge number of staffs in the starting point with less amount of work will cause a crisis at the time of salaries. Hiring a fulltime staff when a part-time can do the job perfectly is unnecessary.
“It's expensive to hire the wrong people. If they leave it's expensive. If they stay it's expensive.”― Nathan Mellor
Avoid being unorganized. You have to follow a procedure in order to make your startup work. Have your plan and goals sorted in your mind. Jot down on paper your list of priorities in order to stick to the plan. Maintain an organised format for all you want to accomplish. When you begin with a startup, a number of things happen at a time, so listing them according to your priority and then finishing them is the best you could do.
Don’t avoid suggestions and decisions that people give. Learning from the experts always helps to avoid some loops in the field of A particular business. a person with experience can definitely be of your help if you decide to listen to them. The words of the peers should be paid heed to.
Maintaining the budget should not be neglected. Planning on the budget in order to avoid spending extravagantly is required. The budget should be maintained for growth and development. Budget planning should be made locally so that it helps us to maintain the economic growth of the business. High budget tenders should not be encouraged.
Marketing of the business should not be neglected, it is one of the most important factors for the survival of your startup. It should be clear and sharp so that it reaches the target audience. Marketing at the starting stage should not be very elaborate as these marketing conditions affect growth. A proper marketing strategy has to be made so that your business can be visible in front of your customer and they can get attracted to it.
Avoid confusion in assigning work while maintaining the budget. Confusion may lead to stress which in turn affects progress. Confusion should be avoided in terms of marketing too. It should be straight so that people can get convinced easily. Creating confusion will only be haphazard for the business.
Forgetting About Bookkeeping
To utilize the money properly and keep it from wastage, make the required documents and accounting records perfectly. To avoid the common mistakes that startup founders make these points to be noted. Bookkeeping is a major part of a successful business. You need to record all the expenses and incomes accounts to tally the growth of the business. You need to record all the petty and big cash expenses daily.
You do many unwanted expenses in the daily course, which can be easily avoided or can be minimized. So identify those expenses and reduce them to a minimum level. Don’t spend money on the decor of your office to attract customers, as they are here for the product. Don’t hire unwanted employees like receptionists, if you are capable of handling your own business calls and making your own coffee.
Startup founders make many mistakes after getting the seeding. While building a business, mistakes need to be avoided. Although mistakes are a part of our life and they are inevitable, it is important to avoid these mistakes that will do nothing but lead to problems in your business. Even when you make mistakes, learn from them and try to not repeat them.
What causes startups to fail?
Most startups fail due to insufficient financial resources.
What percentage of startups fail?
90% of startups fail in the first 5 years of the company in India.