Did you know that 90% of startups end up failing? You have a better chance of winning playing the latest slots than running a successful startup. This shockingly high rate of failure is caused by some common mistakes which we’ll cover in this article, along with helpful business tips to overcome them.
Tip 1. Have A Solid Business Plan
Many startups begin with a great idea, but then founders fail to effectively materialise this idea into a viable product as they don’t have a detailed plan which lays out their strategy to guide their action. If you are planning to found a startup, one essential business tip you should follow is creating a detailed business plan.
Your plan should separate the different functions of your business such as product development, marketing, finance, and in each section come up with a clear strategy on how you are going to achieve your goals. You should also use your business plan to clearly state what your business is, what it does, and how it plans to succeed. By articulating these simple points into clear words, you and your employees will have greater clarity on the mission you are trying to achieve.
Another incredibly important reason to have a business plan is that it is critical if you want to receive debt financing or attract investors. No bank is going to lend you any cash if you haven’t even spent the effort producing a professional business plan. This may seem like a small business tip but if you want to unlock cash to supercharge your startup, you better start writing your plan today!
Tip 2. Don’t Ignore the Needs of Customers
While it sounds cool to quote Henry Ford and say, “If I had asked people what they wanted, they would have said faster horses”, the reality is if you don’t give customers what they need, your startup is destined for failure. Current research into entrepreneurship has shown that 42% of startups fail because they don’t effectively meet the needs of consumers (don’t ignore this business tip!)
Before you create the next amazing innovation, follow this easy business tip and just stop, think, and ask yourself “does my product or service really benefit people?”. You need to put yourself in the shoes of future buyers, and really understand the reason your product or service is so compelling.
To give you an example of a compelling product, just look at smartphones. With a few clicks of a button, you can browse social media, shop online, listen to music, send and receive cash and so much more all from a mobile device. If you can come up with a product that is even a fraction as useful as a smartphone, your startup will surely succeed!
Tip 3. Hire The Right People
This business tip here tells you not to try to do everything by yourself! Many new startup founders ignore this business tip and want to be hands-on on every aspect of the business. Simply because they want to keep costs low and fear losing control of their precious business to others. Unfortunately, the result is tasks take forever to complete, and many things have a higher chance of being done poorly if the founder lacks specialized skills.
If you are serious about your startup succeeding, then you should consider finding a co-founder who complements your skills (Airbnb followed this tip!). For example, if you are great at marketing and sales then find a technical co-founder who can run the website, app and e-commerce platform.
Alternatively, if you don’t want to give up equity in your startup you can hire freelancers. Thanks to the internet and online platforms, you can instantly find multi-talented freelancers who are capable in design, copywriting, marketing, web development and more! Remember to do a quick check and only hire people who have extensive reviews and experience performing similar tasks.
Tip 4. Prepare Enough Money
Even with the best startup idea, your business won’t get off the ground if you don’t have the cash to fund your venture. Before you start working on your business, you need to come up with a budget for all aspects of your startup. Not only do you have to develop a budget, but you need to come up with sources of finance. Three effective ways to access funds are selling stakes in your startup and giving away equity, loans from banks, and loans from friends and family. Keep in mind that you will always need way more money than you think, so expect your budget to underestimate your costs!
Now that you know the 4 most common mistakes startups make and the tips to help you solve them, you’re in a better position to launch your startup. Remember to follow all of these business tips and keep going even when things get tough!
We would love to hear from people who have managed to run their own successful startups. Share with us on our or what business tips you wish you knew before you started your venture and share your top online business tips!
Edward is enthusiastic about assisting businesses, especially local firms, in developing a more personal online relationship with their consumers and prospects. While trading and market research is his strong USP, his expertise in finance works like an added charm to his credentials! He is a finance genius!
Found8 is the leading coworking space provider and second home to an extensive community seeking collaboration and growth opportunities. We pride ourselves in delivering high-touch customer service underpinned by care.