Are you setting up a business? Are you thinking of leaving your job and becoming an entrepreneur? If so, surely, you would have gone through the success stories of others. But it’s equally important to learn from the failures of other startups.
Setting up a business involves tremendous risk. So, you would want to ensure that you’re not missing out on any key steps or processes. The best way to do that is by learning from the mistakes of others. To help you with that, here’s Chalkboard’s cautionary list of ten mistakes that all entrepreneurs should avoid.
You can’t build anything without a blueprint. A crucial step in launching your startup is to write a business plan detailing how long it would take you to develop your product, the price at which you’ll sell it, and the expenses you’ll incur, among others. Without a business plan, a lot of your efforts might be in the wrong direction.
Having a breakthrough idea is a great thing. But that alone won’t ensure the success of your startup. Even if it’s a small business, you would need to know how much it would cost to set it up. There will be costs you may not have considered, such as professional fees.
Even if you’ve got a brilliant product or service, it might take several months for you to generate income. You should ensure that you have sufficient funds to last that crucial period when there won’t be any substantial income.
If you’ve been working in an office, you might be used to a well-oiled organisational structure. You would need to replicate that when setting up a business. You should allocate responsibilities with clearly defined roles. There should be an internal system for product or service development, reviews and approvals.
More than the quality of the product or service, most entrepreneurs worry about whether they would be able to scale it. This is usually due to the pressures of the startup-venture capital ecosystem that’s mostly interested in scaling. But your primary focus should be your product. Scaling will take care of itself at a later stage.
The startup graveyard is filled with products or services that had little relevance to the needs of the market. Before you start developing your product, you should know if there is a demand for it, whether you have competitors, the price at which they sell and if there exists another product that can easily or freely offer something similar to your product.
Partnerships build startups. For your startup to get off the ground, you need a team that understands the mission, is willing to take risks for it and passionately believes in what you’re offering. Some entrepreneurs feel that since it’s their idea, nobody would know it better. This limits the kind of constructive feedback that will improve your product.
Some entrepreneurs hold themselves back by aiming too low. This could be because of an inherent fear about market conditions or discouraging news from others in the sector. If you’re setting up a business, you owe it to yourself to make it as extraordinary as possible. Don’t hold yourself back because of the fear of failure. There will be disproportionate rewards if you go beyond the category expectations.
Since they get carried away by the minutiae of running a business, ironically, entrepreneurs often leave significant aspects of their business including product development and sales to others. This is seriously counterproductive. In the initial stages, you should care about and be involved in all important areas of the business. These decisions are what often decide whether a business will succeed or not.
For consumers to use your product or service they should know about it. Most businesses feel that the inherent benefits of their product will draw in customers. They don’t. You should explore all cost-effective channels of marketing and public relations to create a unique brand identity.
When setting up a business, such a checklist will be of immense help. This will ensure that you do all that’s necessary and avoid the mistakes that failed startups usually make.
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