It’s often said that over 80% of new businesses fail during their first 3 years in operation.
However, not all of these businesses need to fail. With the right planning and funding, businesses have a better chance of succeeding.
Here are some of the biggest mistakes that early stage businesses should avoid making.
Weak Team and Poor Leadership
Another factor that could kill your business is not having a great team or the necessary experience to assemble one. A leader who can not recruit and motivate the most talented people for the jobs on which the startup’s success depends, will surely lead his startup to failure.
As a founder, you need to be able to sell yourself and your idea for people to come work for you.
Poor Business Plan
Having a solid business plan is the basis of a successful business. A solid business plan helps you to outline realistic goals for your business, how your business can meet those goals and possible problems and solutions. A plan helps to figure out the costs needed for the business.
It is important to follow a business plan strictly. If you start changing your strategies, you are asking for failure.
It is important to start your business with enough money that will last you to the point where the business is up and running, and you have enough revenue flowing in.
Trying to stretch your finances at the early stage may cause your business not to gets off the ground at all.
Poor Marketing and Online Presence
Knowing how to get the attention of your target audience, and ultimately convert them to customers, is one of the most important skills of a successful business owner.
Having a great product is good, but you also need a great marketing strategy to convert that product into a continuous source of revenue.
Your online standing and social media presence is just as important as your company’s physical presence in a shopping area. Your level of presence online will determine how much trust people would give you.
Building the Wrong Product
Building a product without really investigating the market to know if that is the right product for the market, is a total roadmap to failure.
When building your product, you have to consider who your potential users are, what skill sets do they have and what are the existing solutions they are making use of. From there, you will be able to determine the need of the user and prevent your business from wasting excess cash building an expensive product that nobody needs.
Scaling too fast
If you’re trying to expand the reach of your business, make sure that you understand the markets into which you’ll now be reaching.
If it is the scope and focus of the business you are trying to expand, make sure you understand your new products, service and intended consumer as much as you can. When a business scales too fast and doesn’t take the same care with research, strategy and planning, the financial drain of the failed expansion can sink the whole business.