Getting rid of a 9-to-5 job is thrilling for everyone but starting a new venture can be disconcerting. There is a lot to deal with and think about. As you already know, most of the start-ups get failed within the first two years of their launch. What does it mean for you and your business journey? It means that if you are going to stay here long and want to succeed, you need to pass through all the obstacles by avoiding all the common pitfalls you get in the way. This post will talk about 8 common mistakes that affect businesses badly and cause issues in their survival.
The Wrong Choice – Your Services/Product
There is a great rush in every industry. Talking about my domain expertise, there are countless agencies providing SEO services. With too many players already situated in the market, it becomes difficult to stand out and get continuous business contracts. But SEO skills have been in the top demanding zone and it was a right choice for me. It worked.
For a skill or product to make a viable business option for you, make sure that it is actually highly demanding in the industry. If the market has already flooded with service providers, you will likely struggle until and unless you have top class services as your unique selling point. Before you start your business, ask yourself a couple of questions:
- Are my services/product demanding? Are they evergreen?
- What problems or needs will my services solve?
- What additional points my services will have as compared to the offers made by competitors?
I am mostly the one-man show but if you have your dedicated team in place, don’t let them get segmented. Dijiwan got launched with a great potential but they folded after their responsibilities failed to overlap. The problem with their start-up was not external but the internal one – they all focused on individual jobs and ignored the cumulative efforts and ruined the potential. They couldn’t succeed due to the cracks, failing in completing tasks, and they had to shut the agency. Being in a start-up means seeing what needs to be done and doing it, whether it is in your job remit or not.
There’s everything in your name
What’s in a name? The quote doesn’t resonate with the branding perspective. The name of a brand is very important which should reflect its values, mission, and products. Many of us don’t get the domain name available of our preference. When Lauren and Dayna launched their PR agency, Suite 203 Communications, they looked for suite203.com but the domain name was already booked by someone else. Thus, they had to settle with .ca extension and I think, that worked fine for them since they were operating in the Canadian market. Lately, in 2017, they were able to buy .com extension from the former owner.
Luckily, today there is a lot more options when it comes to choosing the domain extensions. .io, .co, .agency, .asia and .xyz have seen a huge increase in popularity.
Are you running out of cash? You’re not the only one who is dealing with this issue. It’s a pretty common scenario where start-ups struggle because they do not grow as quickly as they expected earlier. You should always be ready to face this problem – have your eyes over future investors, pitching your product on the strength of prototypes, and getting those orders in while your first run is still in production. Everybody needs a momentum to grow, grow and grow.
Trying to Proceed Too Fast
As a business leader, you want to initiate momentum, getting sales, boosting your brand image and that’s not wrong at all but trying to grow too fast is. Let’s see this case – You go ahead and hire double as many salespeople as you require at the moment, you may run out financially before you get there. If you put on a production run which is twice your estimated sales, you may run out of cash before you sell it. Think growth, yes, but also realism.
Lacking Adaptive Behavior
See, you are in a start-up. That means, you might have a budget constraint and therefore, you/your team will have to be flexible with the roles and responsibilities. You need to come up creatively with your marketing strategy. Customer feedback is essential for the betterment of your product or services. Listen to your audience and the priority according to the market trends. If you pretend to be the hardcore last business standing in your ways sticking with the single path, you are likely to fail. Good start-ups learn this skill to bend them and turn into a shape which is the winning model, even if it is not the one you planned out initially.
Marketing Goes Wrong
Brian Dean accepts the formula of 80/20 into his blogging journey. He spends 20% of his time on production while rest 80% of his time goes for marketing the produced work. It worked for him, it can work for you and for everyone. You need to learn the art of marketing your product and get it out there to show to the entire world.
Start-ups often make the mistake of not marketing enough, not being able to deliver the right product persona, or marketing products through wrong channels. That’s why market research and data audit becomes so crucial here. Go and do some homework to discover what your customers are looking for and where, and then pitch them with your story.
Not Focusing on Right Things
Brett Martin, Investor at Sonar, publicly admitted the root cause of the death of Sonar and the lessons he learned from its journey. The team focused on engagement rather than thinking of applying growth hacking to the product. That was the key mistake of concentrating on the wrong aspect, or just at one thing, while they should be working from several angles.
Different start-ups fail for their own unique issues, and only they can pinpoint one of those factors as the originator of the failure.