Whilst there are successful startups ideas executed and well-maintained everywhere on Earth, yet there are still startup ideas which fail to be launched due to failures within the first year or two. In most cases, the failures got nothing to do with the business idea, but with how the business side is handled. The business of entrepreneurship is business first, then operations (what your business actually does). The Top 5 common startup mistakes that lead to ultimate failure are:
Lack of Startup Development Ideas
Most startups do not fail because the business idea is bad. The problem is that many first-time entrepreneurs fail to actually plan the business before sinking cash into the startup. No matter how great a business idea is, it can’t succeed without detailed planning. Take the time to work through every angle of your business idea. Not only will you have a better grasp of how far your business can go, you will also reduce your risk and prepare yourself to make the best decisions as you go.
Mistakenly Forecasting Sales
Establishing your initial sales forecast can be difficult, but there are procedures you can follow to make it as realistic and accurate as possible. All too often would-be entrepreneurs build a sales forecast around what they would like to sell, rather than what they are likely to sell. While optimism is an excellent entrepreneurial trait, an overly optimistic sales forecast will leave you with serious cash flow problems and even greater difficulty in securing financing.
Ineffective Web Presence
An effective web presence is an absolute must for business nowadays. Simply posting a website is definitely not enough. In fact, uploading a website without marketing it is like posting ad copy only in your own living room, and if your targeted market doesn’t see it, it might as well not exist. Many recent startups have crashed and burned because the entrepreneur thought that simply posting a website to the internet would drive sales. It just won’t.
Handing Over Critical Tasks “To the Professionals”
Many entrepreneurs believe that a good idea and solid operations are enough to build a successful business, so they start to hand over critical startup tasks, like marketing and accounting, to outsourced professionals. For some, the business side of business just doesn’t interest them, so they choose to forgo learning the details of financial and marketing management. Eventually, these choices backfire. If you don’t know how the money works, you can’t make the best decisions for your business. If you are not aware of the outcomes of your marketing efforts, you can’t accurately forecast sales and thus can’t plan for the future. It’s your business, you need to know and understand every facet from the beginning, or you might as well be working for someone else.
No Ongoing Planning and Review
As the actual operations of a startup take up more of an entrepreneur’s time, it is very easy to overlook the critical tasks of reviewing and planning. Every aspect of a company should be reviewed periodically, particularly the financial statements and marketing plan. If you don’t know where you are or where you have been, it’s impossible to know where you are heading towards.
For the most part, a strong focus on these keys to startup success which is planning, marketing, and financial management, will overcome most of the common reasons for business failure (including the 5 mentioned above). Pay attention to the details from the beginning, learn all you can about running your own business, and don’t let any barriers to block you from building your business into the thriving company it can be.