As an entrepreneur, it can happen that you sometimes think you can conquer the world. But some things abruptly slow your start-up ambitions and bring the company to the brink of failure. This is not always due to the business model or the quality of the idea, but it is because new entrepreneurs do not pay attention to certain areas.
While starting a start-up, it is essential to remember that start-ups are in a very similar circle when it comes to people: similar markets, similar people profiles, similar challenges. But still, some companies scale-up and build multiple markets. That is why we present here the five common mistakes that start-ups make in the first year so that you can successfully avoid the traps.
Not clear with the target audience
Creating the product and then finding out who might be interested can be another big startup mistake. The best ideas arise from the need for a series of specific users. If you do not know your ideal user, you will not know how to target the product to capture it. Know your customers’ age range, interests, hobbies, demographics, etc. It will make the product more suitable for them and will allow it to be developed based on a need for specific users. A startup cannot refer to its potential target as “Millenials” since this term covers a field too large for them to have homogeneous tastes. If you can’t find a specific person that fits your product, you may have to find a new way to approach it.
Overdoing it or Doing it yourself
This is one of the most frequent startup mistakes. As a way of saving resources, many entrepreneurs overdo the “do it yourself” policy. In some aspects of the administration and management of your startup, having the help of other professionals is essential. For instance, Legal advice can help set up an adequate corporate structure, in addition to contributing to tax savings. This type of service can also assist the entrepreneur in his decision-making process, avoiding taking risks, and eventually having to face fines and other penalties from inspection agencies.
Ignoring new technologies
By owning small businesses, technology can give you new opportunities, enable you to get the job done more efficiently, and even help you save money. New technologies can be intimidating and take time to learn and understand, but an unwillingness to adapt to technological advances can harm your business in the short and long term.
Not able to handle cash
One of the biggest mistakes is spending too much, which can happen when an owner or founder gets too excited and recruits many people. At first, they may believe that all new employees are essential, but this will mean ending funds more quickly. To avoid this, hire only those you need and build your staff step by step.
If a venture capital company gave the startup a huge check, then you may be expecting a tremendous result soon. It’s time to work. What if the company has suddenly been forced to incur a costly change? What if an investor withdraws or a client does not pay? Will you able to handle such scenarios if it comes?
Without proper management and finances, a new company can never be successful. Thus, make sure someone good with numbers helps you in your initial days.
Ignoring the negative feedback
When you are in love with your idea, you struggle to accept negative feedback. And instead, it is just what you need. The sooner they arrive, the better it is because it means that if your idea is rejected in its first days of life, at least you will not have spent time building something useless. Instead, you often interpret the feedback of potential users in the best possible way without understanding the “sub-message”.
If a potential customer tells you they would pay for your product, wait until they actually pay. If he tells you he would use the software you created every day, look at the analytics to confirm that this is indeed the case. People don’t like to give negative feedback and therefore often end up not being totally sincere in their judgments. If you look at what they actually do, you will understand exactly what they have in mind.
If your business is not progressing, assess whether it is because you are doing something wrong. If so, monitor your company’s operations, streamline processes, and put an expiration date on errors. Entrepreneurship is a tough challenge in which the important thing is to learn from mistakes. Take these five flaws of most startups into account and avoid them.