So you’ve got a great idea for your business and you’re ready to open your startup company. However, you’re also scared about the well-known statistics surrounding startups. Whilst global startups have always embraced entrepreneurial flair, statistics also show that eight in ten of its companies fail within their first year. You need to know how to become one of the two that makes it through this challenging time without startup mistakes.
We’re here to talk you through the five ways most startup companies trip up in their first year, and how to avoid making the same mistakes:
Business plan and research
A great idea or product is not always enough for a startup to be successful. Most startups are born out of great ideas. But they incur one of the most common startup mistakes and fail because they aren’t backed up by great business plans. Make sure that your business plan is thoroughly researched and well written. It needs to include every aspect of how you will run your company and how it will become successful. Aspects like anticipated costs, manufacturing, marketing, technology, and staffing should all be covered in detail.
Again, you may have a great idea or product, but your research should tell you whether there is a market for it. Before investing your money, make sure that the idea hasn’t been tried before. Or, if it has been tested and failed, look at why this happened and whether this is something you are capable of addressing.
Don’t assume that you will be able to manage financially. You may have your own investment, plus contributions from family and friends, but make sure that this is enough to start your company, without significant external support. Do assume that what you have to begin with is all that you’re going to have for a while, and make it last.
It is very difficult to make a start-up successful by yourself, and it is also a challenge to assemble a winning team. Choose your team members carefully and try to diversify your company. Studies have proven that 23% of startups fail because they haven’t got the right team behind them. Often, the key to a successful team is a mix of experience, gender, race, background, and personality within the staff.
All too often, startup mistakes occur when human ego gets in the way of a great startup opportunity. Don’t be fooled into thinking that customers are waiting for your business, or that investors will be lining up to give you their money. No matter your entrepreneurial background or contacts, your new startup will still face teething problems. Be humble, realistic, and friendly. Work to build positive relationships and maintain crucial self-awareness.
If you’re a tradesman, professional, or contractor, compensation claims and legal costs can quickly bring your startup company to a crashing halt. Although it is not a legal requirement, most companies will benefit from public liability insurance. Tradesman Saver offers a tailored insurance programme to cover all of your insurance needs.
Startup mistakes the first year are avoidable when you plan ahead.