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Avoid These Common Start-up Errors for Ultimate Success
The world of entrepreneurship is notorious for its high start-up failure rates. Your success as a new business owner begins with getting your hustle on and avoiding these common pitfalls.
There are many reasons why businesses fail, and many reasons why they succeed. But there are some situations that pretty much all start-ups will face at some point. Successfully navigate these three things, and your chances of start-up success will radically improve.
Start-up Error 1: Not standing out from competitors
Most start-ups are launched in industries already filled with competitors. This is often because a lack of start-up funds means entrepreneurs need to look for quick wins in busy markets, but that’s not the only reason you’ll be facing competition. Even product and tech-based businesses that are doing something really new and cutting-edge will soon be copied.
So, how does this impact start-up failure rates?
- If you’re launching in what’s known as saturated or over-traded markets, you’re competing against multiple other businesses for the same customers.
- What many start-up owners do in this situation is discount their prices, believing they need to be the cheapest option in order to beat their competitors.
- This quickly becomes a race to the bottom, with everyone discounting to make sales. In these situations, it soon becomes too expensive to offer the product or service and the company closes.
YOUR ACTION PLAN:
- Identify who you think your key customers are
- Hit the streets and start speaking to them: What do they think of your concept? What would they pay for it?
- Research your competitors through Google and by speaking to their customers
- Get your solution into the market as quickly as possible so that you can start testing it in real life. The faster you know what needs to be tweaked based on market and customer feedback, the higher your chances of success.
Learn more about how to launch a Lean Start-Up with our guide, Use ‘lean’ business planning to super-charge your start-up
Start-up Error 2: Not strengthening your business skills and know-how
Consider all the skills early-stage entrepreneurs need: business strategy, financial management, negotiating with suppliers, setting up distribution networks, marketing and sales, product and service delivery and operations, office management and, as the company grows, staff management.
The list is endless – and scary. And unless you’ve done an MBA, it’s unlikely you tick all the boxes by yourself. This is completely normal, but it’s also where successful entrepreneurs stand out, because they recognise their gaps and find ways to upskill themselves.
“I didn’t have a background in finance, and so I left everything up to my bookkeeper. I didn’t even know we weren’t paying PAYE. My business was in danger because I had a big gap in my skills and a bookkeeper who took advantage of that.”
- Kerryne Krause-Neufeldt, founder of I-Slices Manufacturing, a beauty-product manufacturing firm
Luckily, Kerryne didn’t lose her business, but it was touch and go. She persevered, brought her company back from the brink, and immediately did an Accounting for Dummies course, followed by financial management workshops.
“It was time consuming, but worth it. It was the only way for me to be truly in control of my own business,” she says.
YOUR ACTION PLAN:
- There are hundreds of business books and biographies available that offer real, tactical insights and advice
- Business podcasts are free
- Business courses range from free Udemy courses through to practical courses at business schools
- If success is your end-game, combine your passion and hustle with the knowledge and skills you need to succeed.
Start-up Error 3: Letting burn-out get you down
Starting a business is tough. Don’t let anyone tell you otherwise. It can be incredibly lonely, with long hours, limited sleep and mountains of stress. Pretending you aren’t struggling isn’t a solution though.
“My last business had its ups and downs. In one of the bad periods a close friend asked me how I was doing. My immediate reaction was to tell him that everything was fine. Fine and dandy. Meanwhile, I had taken a pay cut, we were losing money and things were the opposite of fine.”
- Nicholas Haralambous, entrepreneur and author of Fail. Learn. Repeat
Nicholas’ reaction is common for start-up entrepreneurs. You’re positive, ‘get-it-done’ people, which makes you an ideal entrepreneur, but also unable to admit to how tough things are – even to yourselves.
When Nicholas finally opened up though, his friend did the same. He was struggling too – because starting a business is the toughest thing you’ll ever do.
After that, Nicholas started working with a mental coach. He realised that his mental toughness would be a defining factor in his ultimate success. He needed the right mental tools to build his business.
YOUR ACTION PLAN:
- Join a networking group or business association.
- Your local chamber of commerce should be able to point you towards a networking group in your area.
- There are many business groups on Facebook and LinkedIn.
- From a mentorship perspective, who is in your circle who has more business experience than you? Ask them if they’ll become your mentor.
- Most people are not only flattered to be asked, but want to pay it forward as well – they remember how tough their start-up years were.