8 Mistakes that Kill a Start-up
Even the biggest business today once started out as young seeds known as Start-ups. Start-ups are the creation of individuals looking to make a difference to society with their ideas; however, not all Start-ups go on to become game-changing businesses with time. Let's take a look at some of the reasons why Start-ups fail:
- Single founder
The flaw could sometimes be found at the root itself. In the past, only a few single founders have found success. So what are the reasons behind this trend?
For one, managing every aspect alone can become increasingly stressful with time. Having another partner helps in all aspects including increasing the motivation and confidence of the founder. Frustration and saturation are all parts and parcels of business and in such scenarios the espirit de corps between founders has a positive impact on the business. However, it is essential for partners to maintain a healthy relationship.
A start-up should only venture under the right circumstances and the right time. However, if delayed too much the Start-ups could lose out on invaluable opportunities. It's fair to say that early movers do have an advantage in a highly competitive market. A close analysis of your timeline should be done to ensure that you are continuously learning and improving. One thing that goes without saying: A plan is a must. Do remember that entering a market too early without a comprehensive plan could totally inhibit your growth.
3. Having no plan! (PLAN- Prepare or Leave All Now)
Creating a business plan is a vital ingredient. You must plan the important aspects including short term and long term plans. Start-ups venturing without any plan find themselves lost or may simply tend to make incorrect decisions due to lack of direction. Disorganized timeline is surely a blunder the Start-ups should avoid. Every start-up must be able to answer: where they see their business after 5 years and how they plan to get there? Do not just plan everything in your mind: Start documenting too. Furthermore, keep in mind to be flexible while planning. Rigid plans could suppress the potential of your business.
4. Playing safe?
Start-ups fail to understand the advantage of beginning afresh and anew. Start-ups play safe by following the path laid down by others. However, what Start-ups often don't realize is that for most of the existing firms it would be a herculean task to update their ways of operation. Start-ups should take advantage of this and strive for innovation, instead of following existing ways.
5. Not understanding the core, no research
Ever thought your competitors could be your guide? A comparative competitors research would give you a valuable insight on industry trends, best practices and also the blunders to avoid. The benchmarks would help you plan more realistically and help in defining the future scope of your business.
- No distinction between wasting and investing
Time and money are precious. Start-ups fail to allocate their time and money efficiently due to lack of foresight and direction. Investing excess time and money on unrewarding projects would be a mere wastage and incur a huge opportunity cost. A careful cost and benefit analysis is very essential while making decisions, which Start-ups often ignore. Start-ups also heavily hire employees and interns to spread out workload and scale up dramatically, which might lead to increase in expenses and no equivalent increase in benefit. It's important that candidates with an innovative mind and strong work ethic are hired. Always ask yourself, are you wasting or investing?
7. Unsuitable workplace and location
Start-ups underestimate the value a suitable office space and location. Workplace is as important as the working team itself and directly affects every person in the organization. A office helps to maintain better relations with the employees, boosts creativity and also builds a sense of belonging and the work culture. Similarly, location of your outlets/shop should be carefully selected with regards to the customer access, popularity etc. of the location. With the numbers of co-working spaces and shared services options now available, start-ups must look the leverage the sharing economy and the start-up eco system.
8. Losing customer focus
In a cut-throat competitive market, the customers must be given high importance. Start-ups cannot afford to ignore the valuable feedbacks from their customers. A customer centric approach should be adopted. At the same time, the start-ups should aim at the right target audience. Choosing an inappropriate target audience breaks down the confidence of the start-up accruing to negative responses and impact.