Small business owners are often first-time entrepreneurs with little prior experience in business. As a result, they often make mistakes that are easy to avoid. Here are some of the most common mistakes made early in a startup and how you can avoid them.
Not Getting the Right Staff
The people who work at your startup are the backbone of your business, and you need to select them with care. It’s not feasible for most people to run a startup entirely on their own, so know that you will need help. Take time to find a core team that can complement your management style and your personality. Remember to be particularly careful when hiring technical staff: If you are not a programmer yourself, it will be very hard for you to assess someone’s programming skills, for example. So find someone from your network with technical knowledge who can help you in the hiring process to ensure you get the best staff possible.
Picking an Inappropriate Location
There are some locations where startups thrive, and others where they struggle. You need to make sure that you’re where the action is – in a location with a concentration of experts who you can consult and hire, with a good network of supporting industries, and which offers attractive living conditions for yourself and your employees. Naturally, the local financial regulations will have a significant impact on your business plan too. Singapore has been rated as the best country in the world for doing business and has a thriving startup community, so it is a good location for a startup. Similarly, California’s Silicon Valley and India’s Bangalore area are considered good locations for a startup.
Not Staying on top of Legal Issues
When you are just beginning your startup journey, there is a lot to do, but you need to make sure that you’re dealing with legal issues proactively. You’ll need to incorporate your startup as early as possible once you’ve validated your business idea and found it to be commercially viable and make sure that you choose an appropriate business structure for your startup. You will almost certainly need to hire a lawyer to make sure that you’re in compliance with the business laws and regulations of your area and to help you file all the essential legal documents. Not doing this legal work early could land you in serious trouble further down the line, so stay on top of it and file paperwork as soon as you can.
Being Secretive, Unreliable or Dishonest
Of course, it goes without saying that you should be honest in all dealings related to your startup. Some new startup founders might feel the need to be secretive about their plans, but generally being upfront with everyone – especially anyone who will have a business interest in your startup – will serve you best in the long run. A reputation for being reliable in your dealings is essential for you to establish trust within the startup community. And while it may be tempting to exaggerate the positives or downplay the negatives of your product of service, a lack of transparency will only cause problems and destroy trust in your business and your integrity.
Not Being Sufficiently Flexible
When you have a great idea for your startup, and you’re convinced that it will be a success, it can be hard to let it go and makes changes, even when the changes are necessary. You need to be willing to modify your idea, your target market, or your production methods to fit market needs when you receive new information. Markets are constantly changing and evolving, and in order for your startup to be a success, you need to be able to adapt your startup to the current context. Don’t get so wedded to your idea than you are inflexible and miss out on changed opportunities.
Lacking in Innovation
In order to stand out in the crowded startup landscape, your idea or product has to be innovative, not simply derivative. If your idea is similar to an existing company, it will be hard for you to get the traction that you need. The world doesn’t need another Google. It does, however, need genuine ingenuity which solves real-world problems in a novel way. Make sure that you have a unique feature of your product or service, and that this is clear throughout your marketing and promotional materials. You need to let everyone know what is different about your startup and what need you will be meeting.
Not Enough Engagement With Customers
You might think that you know your customers and what they want – you’ve identified a target market and you can see that they have an unmet need which your startup can help with. However, remember that it’s important to continually engage with and listen to your customers. Every piece of feedback you receive, even if you don’t agree with it, should be considered. Ridding yourself of your preconceptions about what your customers want will free you up to adapt to their stated needs if necessary.
Even More Tips: 10 Rookie Startup Mistakes to Avoid
By avoiding some of these common startup mistakes, you can help your business grow and thrive in a competitive environment. There is always more to learn, so consult our startup mentoring guide for even more support with launching your startup into success.
