Every year, hundreds of startups born and fail due to a few basic mistakes. Understanding these mistakes is the key to not making them within your own company. Even though there are nearly as many different ways for a startup to fail, certain mistakes seem to repeat themselves time and time again within small companies. Here are five major reasons startups fail and what you can to do avoid falling prey to them.
Taking on Too Much, Too Quickly
Although it isn't true 10 percent of the time, many startups are run by people relatively new to business. They are learning the ropes as they go along, dividing their time between educating themselves on one aspect or another and working on growing their company. While there is nothing inherently wrong with this, it can make maintaining focus on the core goals of the business more difficult. If a business owner finds early success with a client and starts growing too quickly, the business can outrun the owner's know-how.
Take it slow. If you can't handle expanded growth, either allow things to progress naturally or partner with someone who knows what they are doing. Before you start growing, take the time to set measurable goals so you can track the progress of the company, not only to remain on track during the slow times, but to ensure you aren't moving too quickly.
Ignoring Social Media
In today's world, social media is everywhere. Almost every major business is involved in some way or another on Facebook, Twitter, LinkedIn and even Pinterest. However, if your business is just getting started, you may not see the point in having social media accounts. Surely the company isn't popular enough to garner any interest, right? Wrong. You should create a Twitter account, a Facebook page, and any other major social media accounts for your business in the early days of the startup. This gives you the time to begin growing your following slowly, so that when you do have something important to say across social media, there will be people ready and waiting to hear you.
Failing to Focus On the Office
The space where your company works is important. It will be where you spend the majority of your time as the company grows, so you should give it the attention it deserves. There are countless stories of people who start with nothing but a computer and a table at a coffee shop, and while those are inspiring, they're stories because of how difficult it was for that person. Take the time to invest in proper furniture for your office. Filing cabinets, tables for meetings, mailroom furniture, etc. Having a place for everything and everything in its place will ensure your work goes smoothly and that you don't waste time looking for misplaced files in a cramped, disorganized home office.
Being Too Rigid
The idea that gave birth to your company is yours. You're proud of it. That's understandable, but falling in love with an idea and refusing to change can be fatal. As Stephen King said, “Kill your darlings.” A company has to be flexible and adaptable. If your initial idea doesn't work in the long run, you must tweak it until it does or face failure. Perhaps your idea is profitable, but with a slight change could make ten times the revenue. Are you going to let the opportunity pass by because it doesn't fit with your original vision?
No matter how successful you think your idea will be, you have to place focus on the marketing strategy. Knowing how you will market your business, whether it is a product or service, is essential to determining early on whether it will be successful or not. Early marketing strategies are a way of validating a business concept. If you can't market it, then you can't make money from it.
By taking the time to learn from these five mistakes, you can improve the chances your startup will succeed. Heed the advice of others with more experience and watch as your company grows beyond your wildest dreams.