Top 10 Common Startup Mistakes

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You probably already know that, for different reasons, around 90% of startups end up failing. And 20% closed their operations just in the first year of operation. While starting a business may seem daunting, you don’t have to help chasing your dreams. In this blog, we’ve compiled a list of some common startup mistakes that you should avoid if you’re considering starting your own business.

1. Don’t make a business plan

The biggest startup mistake to avoid in 2022 is not having a concrete business plan in place before you begin your journey. You need to think of your business plan as a blueprint or roadmap for your business. This plan helps you (and the other people you want to embark with you with) understand the purpose of your startup, what are you trying to accomplish, what customer needs are you trying to meet, who your competition is, who are your target audience, and more.

Having a good business plan in place greatly reduces the risk of startup failure. It doesn’t have to be very long or too formal. If the plan answers all the important questions and gives you the necessary advice, that is more than enough. Most importantly: don’t take this one off as something else to check off, do it with conviction.

2. Not understanding your market, your target audience and your niche

Another common startup mistake is not spending a lot of time understanding your target audience as well as the market you are trying to enter. For some tech founders, it may be easier to develop an app than it is to talk to their customers. However, unless you don’t know who you are building whatever you are building, you won’t get any real ideas or feedback. It is crucial to understand and identify that creating great products is not enough for a business to be successful. Understanding your target audience is also important.

3. Do not deal with legality

We can all agree that finding a viable business idea is not something that happens every day. So protecting your business and your business ideas should be high on your priority list. You can use search engines like Google to check whether your brand name is a registered trademark or not and whether the assets you use in your products are not the intellectual property of anyone else. Additionally, make sure you set up your business before the first round of funding or before you generate significant income (whichever comes first). You also want to deal with industry or country specific licenses and permits.

SEE ALSO: Here are the 6 biggest startup failures around the world

4. Hire too early

Hiring full-time employees when a part-time employee is enough, or sometimes hiring themselves, is a big mistake a startup can make. When looking to hire someone, make sure you understand the scope of the job and decide whether you want someone to hire full-time or part-time.

5. Hire too late

10 startup mistakes to avoid |  iTMunch

No matter how passionate you are about your startup, there will come a time when you will feel overloaded, exhausted, or overwhelmed. Startup founders and entrepreneurs need to understand that they don’t need to run the entire business on their own. It’s a big mistake when they think they’re alone and aren’t trying to surround themselves with trustworthy counsel. Find wise, reliable and credible people you can count on, discuss your strategy, progress and challenges.

6. Involve bad investors

When trying to involve an investor, in addition to their money, their vast experience and vision goes with it as well. The first group of investors in any startup will make it or break it. These investors place their trust in the potential of the startup. If you receive funds from a venture capital firm, they also give you access to their resources, such as a network. It is therefore very important that the objectives and vision of the investor are aligned with those of your startup. Otherwise, there could be long term problems.

SEE ALSO: 7 Ways To Use Technology To Keep Your Staff Motivated

7. Incorrect calculation of capital requirements

Many startup founders, in order to avoid getting into too much debt, think they can go further with less capital. In an attempt to minimize stock dilution, they often forget to factor in unforeseeable delays and adverse challenges. Having a habit of being positive, they tend to think of the best scenarios. While this is great, when it comes to capital, it’s best to plan for the unexpected and raise a little more than what is needed.

8. Do not have a unique product or USP

In a competitive market flooded with so many products, only the voices of those brands that have something valuable to offer would be heard. If you don’t have a product that no one offers, or a product with a unique selling point, then your target customers will have no reason to choose you over the competitor. Avoid this common startup mistake by doing extensive market and competition research and asking yourself who your competitor is, who are they exactly targeting, what marketing methods and channels do they use, how much do they charge, what is their USP and what is yours?

9. Price too low / high

Avoiding this startup error is tricky. Too high and few people can afford it or won’t be willing to buy it, too low and you won’t be able to make a profit. Even large organizations can get it wrong the first time. To avoid making this mistake, do enough market research and understand how much people are willing to pay for your product offering.

10. Rush to launch and / or evolve

Another big mistake to avoid is rushing to the launch. “Better to do than perfect” is a saying that does not apply here. Because you have to be sure that you are prepared for what is to come. Once you get started, grabbing the attention of the public, inquiries will flow in, and so will potential customers. You need to make sure that everything, including all of your processes and systems, payment terms, communications and contracts, is in place. Otherwise, you risk appearing inexperienced and unprofessional. So make sure you’re really ready to go before you jump in.

SEE ALSO: The 10 most active tech venture capital firms in the world

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Source

[1] Failory (2021) “Startup failure rate: ultimate report + infographic [2021]” [Online] Available from: https://www.failory.com/blog/startup-failure-rate [Accessed January 2022]

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