Surprisingly, 50% of the start-ups are likely to fail within 5 years of their establishment. While 25% of the start-up doesn’t survive the harsh reality of the business world for even a year, only 10% startups will make it past 5 years. These statistics implicate that majority of startups are making one or the other critical mistakes which are fatal to their business. Here is a list of 10 biggest mistakes a start-up must avoid in order to thrive in the competitive landscape.
1 Starting-up without a Business Plan
Starting a business without a detailed business plan is one of the critical mistakes most founders make. Without a business plan, many real business scenarios such as the threat from competition, market forces and risk involved are left out.
2 No Marketing Strategy
Going into business without a proper marketing strategy is gullible and at times fatal to the business. A detailed plan on how the startup will acquire its first few customers and what will be the trajectory of growth should be thought out beforehand. A web or mobile app strategy becomes failure without a properly researched marketing plan.
3 Improper Financial Planning
A start-up must be financially prudent as with budget restrictions every penny matters. Most startups fail because they go all in with their resources without having a contingency fund. Cash inflow is a must for the survival of a start-up.
4 Being Rigid about Business Idea
Most founders are obsessed with their “million dollar idea” and they tend to ignore the business realities. Most start-up fails because they are more focused on their business idea rather than their customer’s requirements. Start-ups need to be flexible to adapt to the business environment.
5 Implementing a bad Hiring Strategy
For a start-up, every employee is a change maker and they need to wear multiple hats. Every employee needs to understand the vision and share the passion of the founder. One of the reasons startups fail is that they tend to hire unintelligible.
6 Not taking Customer Feedback
Customer feedback are critical to the success of a start-up. Start-ups tend to either completely ignore the feedback given by their customers or get intrigued by positive feedback filtering out negative ones.
7 Scaling up Operations too Soon
Growth hacking a product before it is market fit can do serious damage to a start-up. Founders tend to get assured of their success too soon and scale up operations. Validating the need to scale up is important before starting to invest in it.
8 Being Driven by Investors
One of the biggest mistakes that startups make is poorly managing investors. At times, the investors tend to interfere with operations to ensure their interests are above the interest of the customers. In such cases, the start-ups are doomed for failure.
9 Failure to Implement Contracts
Not implementing contracts is bad for the health and reputation of a start-up. Failing to stick to the contracts may sour business relationships which could be fatal for a start up. Execution of contracts is a must for building a positive brand image.
10 Failing to create a Differentiation
Copying the latest fad and imitating competitors may have short term gains but it can adversely affect the long-term vision of the start-up. Creating a differentiation from an early stage onwards is important to sustain and thrive in a competitive market.
The real mistakes are those from which we learn nothing. Failures are inevitable milestones on the path to success. The Start-ups which learn from their mistakes and can transform their failures into stepping stones will eventually find success. You may also like reading: Top 8 Tips to Develop Killer Mobile Apps for Startup