If you’re the CEO of a startup, you’re probably already aware of the sobering statistics surrounding startups. Approximately 90% of startups fail, with 10% failing within the first year. Furthermore, only about half of the businesses survive to their fifth year, and only about a third of startups survive to their tenth year.
It’s all too common for startups to fail, whether they have a weak founding team, are crowded out by the competition, or simply run out of money. Avoid these common blunders to keep your startup going strong.
1. You’re not keeping track of your time
Many startups fall into the first trap of not optimizing productivity. Anyone using Agile processes in a startup should keep meticulous time records. This tracking is especially important for software developers, but it also applies to anyone working in a startup doing task-based work.
That is one of the advantages of time tracking: It allows you to keep track of how long things are taking and what is causing delays. You’ll be able to improve where necessary once you’ve gained a better understanding of your progress. Furthermore, keeping track of your time as things get started will assist you in developing a process that works for your startup and its team.
2. Marketing Demand Ignorance
Many startups fail due to misreading market demand or failure to conduct market research. That’s why it’s critical to thoroughly research your market and make sure there’s a market for your product before investing too much time and money into launching it.
Consider your ideal customer, taking into account the demographics of your target market. You should also think about things like:
- Why would this target customer want to buy your product (what problems does it solve?)
- What would your target customer be willing to pay for your product?
- How do you think you’ll be able to reach your target market?
- In your target area, how many target customers are there?
Investigating your competitors and possibly running a beta test to test the waters on a smaller scale are all part of market research. As you conduct these various aspects of your market research, Google and social media websites will be beneficial. Remember to analyze the results you obtain to ensure that there is sufficient demand to keep your startup afloat.
3. Forgetting about your marketing
Once your startup is up and running, a strong marketing team will be essential to keeping it that way — something you should plan for ahead of time.
According to statistics, 56.9% of startups have a dedicated marketing team. 15.3 percent rely solely on the owner to market their business. When your resources are limited, you may not be able to hire the best talent or afford helpful marketing automation tools, making startup marketing a hassle. You can still educate yourself on marketing best practices to help your startup grow even if you’re a one-man band.
To get a crash course in all things marketing, take advantage of free resources on website design, social media marketing, and email marketing. It is not necessary for your marketing to be complicated or fancy. You’ll be able to produce results that will keep your business going if you know your target audience, are familiar with their preferred online platform and are consistent.
4. Failing to pay attention to Accounts Payable
Cash flow issues were the cause of 82 percent of businesses failing in 2018. Unfortunately, poor cash flow is a startup killer more often than not, so it’s critical to avoid it by systematizing your accounts payable management to maintain good vendor relationships and plan for related cash flow.
An end-to-end accounts payable platform that automates invoice and bill processing is the best option. This software streamlines your processes by centralizing all information about your company’s spending and purchases. Separate documentation, corporate credit cards, and ACH or check payments are unnecessary.
Instead, you have complete control and visibility over all of the information you require.
5. Not Enough Networking
Start networking as soon as possible. Networking aids in the discovery of new business and partnership opportunities, as well as making you more appealing to investors. You can also use networking to find mentorship and peer support, as well as business resources to assist you with your startup.
The following are some good networking ideas for entrepreneurs:
- Attending trade shows or industry events
- Using social media communities and groups
- Participating in business and nonprofit organizations in your community
- Getting involved in professional organizations
Keep your business cards in your pocket and remember to network wherever you go.
You never know when the ideal opportunity will present itself. It usually happens when you least expect it!
6. Recruiting People You Know
Mixing your professional and personal lives is, in most cases, a bad idea. Consider this scenario: You hire a friend or relative, but their work isn’t up to par. Will you fire them, risking a rift in your relationship, or will you grin and bear it while they continue to produce subpar work? Hiring close friends or family members, unfortunately, frequently results in disaster.
There are, of course, some exceptions to the rule. You might already know a professional, friendly expert looking for a new job in their field in some cases (this is another reason why networking early is so important). It’s fantastic if one of your friends is qualified for the position. Just be wary of hiring someone just because you know them — and try to hire acquaintances rather than close friends to avoid sabotaging existing relationships.
7. Ignoring the Signs of Burnout
The startup world isn’t known for prioritizing work-life balance. However, if you don’t establish some limits now, you may find yourself exhausted and unmotivated sooner than you think.
Recognize burnout symptoms such as stress, irritability, fatigue, insomnia, physical health problems, and more. Then, if you need some time to get away, have an “escape plan” ready. Even better, establish routines now to ensure you never reach the point of crashing and burning.
It’s critical to have all of the tactical pieces in place for your business to succeed, but it’s also critical that you recognize the signs of burnout and take steps to prevent it.
Even if you take weekends off or pause during the workday to grab lunch with a partner or friend, your company can still succeed. It’s even more likely: most working Americans say that taking vacation time makes them feel more energized and less stressed, which leads to increased productivity and higher quality work.
Continuous stress management should be a top priority.
Assist Your Startup’s Growth
The startup market is competitive, and as a startup CEO, you’re expected to wear many hats. Unfortunately, this makes it all too easy to make a costly mistake that could put your company’s momentum on hold before it even gets off the ground.
Your startup will have a much better chance of success if you avoid these seven common planning mistakes.