Setting up a new business isn’t a big deal, but it may become a startup mistake if you neglect certain vital points. As the world is growing, people have started to come up with new ideas and innovations. It has been seen that the new concepts are making big differences in the overall economy and the traditional ways of performing a task.
For example, we used to have a small cassette player in our home which is now replaced by HiFi-wireless music players. We had seen days when we used to travel 1-2 km to get a taxi, but now we can book a cab from our smart-phones. All these ideas have evolved as some great business plans. But some businesses have bitten the dust in a mere few days of initialization. The failure wasn’t the concept, but the execution.
Here we’ll be talking about such 17 small business startup mistakes to avoid that people do while boarding their flight to a new business.
1. Incompetent Ideas
The deep market research gives a lot of insights about the trend and ideas circulating in the market. One of the biggest startup mistakes is to neglect the worth of your ideas. With fashion, changes a lot of other aspects. A bell-bottom trouser maker might not be able to sell anything in 2019 as we wear narrow fits.
What to do: It doesn’t mean that you throw your idea in the trash. Try to identify the people interested in your concept. For this, step out in the market and talk to as many people as possible. Try to meet the industry experts and discuss the pros and cons, fluctuations, and new demands of the industry. Try to figure out how your idea can add value to your customer.
2. Going just with Instinct
Concepts evolve when we have seen things around us. A bartender would think of better liquor flavors, a driving enthusiast may get his car electrified to cover more kilometers in lesser fuel. These concepts might click to your instinct, but you may not get the ideal customer for this.
What to do: Small business startup mistakes comprises of many such mistakes. Don’t just go with your instinct. You may feel the severe need for a particular thing, and you started a business on its basis. Doing proper research on the market is a must to start any business. Every corner of a city may have a different taste and preference. Hence, you should be very clear about your product’s demand in different regions. This way, you can place it better and start acquiring presence.
3. Being Distant from the Latest Technology
Technology helps a lot to ease out your tasks. In terms of computers, you would like to work on the latest configured system, rather than a two decades old Pentium 4. One may possess a great idea but the execution and proper time of launching the same would impact vigorously, failing to which may become a fatal startup mistake.
ALSO READ: Top 10 Biggest IoT Security Threats & Challenges in 2020
What to do: Try to figure out the latest technology inputs available in the market to execute your plan. The best way is to consult with industry experts or working as an intern. For, e.g., if you wish to manufacture speakers in 2019, figure out how you can use the concept of voice assistant into it to add value to your startup.
4. Targeting Wrong Customers
Common startup mistakes may become big ones if the targeting goes wrong. Any business or product can be wiped out with wrong targeting. Some products may sound too obvious for a particular audience group, but the situation may differ when it comes to another group.
What to do: A speaker system seller won’t target the audience which is more interested in buying a fridge. Though modern trade can place them together on the same fixture, they’ll have different buyers. Wrong targeting will never bring adequate ROI and the business may not survive. The best way for this is to have a clear understanding of your territory and how people will react over your product no matter the level of competition.
5. Failing to Forecast the Future
Have you seen industries getting shut off that once had outstanding products? Their products were running on a dated configuration that leads to their failure. A lot of fatal startup mistakes happen when the forecasting isn’t accurate or completely wrong. With the BS6 emission norms in India major brands like Fiat, who are global leaders, have washed off.
What to do: A product can never go wrong if it had been forecasted much before. It is a common startup mistake to avoid in recent times. So, keep researching your niche, attend major conferences, and talk to industry specialists. Keep your limits broad and research about things out of your niche. The sixth sense is a big thing that helps you forecast. People won’t buy Bluetooth speakers when the era is about smart speakers. So you’ll not just talk to speaker manufacturer but with someone who can put in intelligence to it.
6. Long Term Plan
Trends are always changing; they don’t have a fixed tenure. The fashion industry is one of the fastest trend-changing industries. Big and small business mistakes and failures happen when the long term vision has flaws.
What to do: Try to generate money from the money. This means your existing product can help you get leads and sales for your next product. Cross-selling and up-selling your product is a great idea to draw better sales. Additionally, creating an ecosystem of products is among the hottest long term plans that brands but for that, you need to have an awesome product. Your target audience should understand its value and your services to enter your ecosystem.
7. No Competitor Research
Competition in the market is fierce irrespective of industry. As the trend changes, competition shifts. It will remain there always. Panic situations come in when the competition launches a much better product, and then you realize that your product is from the last decade.
What to do: No matter how innovative your idea is, sooner or later, you’ll see competition. Businesses can’t grow if they fail to produce antidotes or better product than their competition. Start focusing on your competitor’s products. Try marketing either differently or on the premium side of them to earn from all the efforts.
8. Inadequate Funding
Every business requires a minimum fund to initiate and run. Even writing a blog post requires an internet connection for research and uploads. Over time, you would require more funds and monetary gains to grow your business. Unplanned fund management may result in wiping the fund early, and you would miss out on a lot of opportunities.
What to do: For any business, it’s important to keep the expenses less than earning. This management will run throughout the business tenure as a thumb rule. Unnecessary or not-so-important tasks can be delayed or even canceled and focus should be completely on expanding the business at minimum cost.
9. Improper distribution of Funds
People with multiple verticals have been doing this in the last few years, especially those who are in the real estate sector. Builders took money from buyers, and instead of putting that money in the construction of actual projects, they pushed that towards a new project. Ultimately, they declared themselves bankrupt due to such a fatal startup mistake.
What to do: This is great learning that the funds allocated to a certain project must be utilized for the usage of the same. It can be further distributed within the same channel. Fund managed for Project A shouldn’t be used for Project B; else, nine of them would survive.
10. Expecting Growth without Marketing
Nobody will get to know about anything in this world without an introduction. Brands are being recognized due to the communications that they made during all these years. They have done enough marketing to attain a position where people are aware of them. You won’t get noticed until and unless someone introduces you to the world. It’s a common startup mistake that businesses are doing.
ALSO READ: Digital Marketing Strategy to Increase Conversions
What to do: If nobody is interested, let’s introduce you. Marketing is all about projecting your product or business or identity among your target audience. It should be so good that people should ask you questions and, if digital, comment on your pages. This way, you’ll be able to engage a lot better than before.
11. Handling Everything Single-Handed
Supernatural powers are blessings that only a few possess. Not everyone is a Ninja. A business comprises various aspects, including marketing, production, sales, technology, customer support, etc. If you handle all of them single-handedly, you’ll end up having a hodgepodge situation for yourself with zero productivity.
What to do: Follow the hierarchy system and create a team of efficient people dedicate your responsibilities to bring the maximum output of your effort in lesser time. You can always keep some decisions to be executed from your end though.
12. Ignoring Target Group Emotions and Demand
A product won’t be successful if it has no demand in the market. As mentioned earlier, you would need good market research before stepping into a business. A person exploring the market for the best deal in Smartphone won’t end up buying a 70 inch LED TV.
What to do: Identify the demand for your product in the market. If you feel your product isn’t much in demand than you should work on your marketing practices on how to create a demand for your product. Though Smartphone buyers may not end up buying a big TV, a discount on TV on purchasing certain Smart-phones from your store would make him think over it.
13. Mixing Business and Relations
Doing business with siblings, friends, etc. is good as it carries confidence and reliability factor. But when the money matter is involved, it may create some differences.
What to do: Calculations and fund management should remain transparent. You can hire a third party accountant for this for unbiased money distribution.
14. Being self-obsessed of the business
The market is competitive, and criticism is everywhere. These points may let down a majority of people because of their deep emotional touch with their concept. This small business start-ups mistake impact adversely on their business process
What to do: A lot of people in the world are doing business similar to yours. So that means you have competition and you should analyze their processes and products. It will help you in projecting your product.
15. Ignoring Legal Terms including IP
Licensing, rules, and regulations are mandatory aspects of any business. People sometimes don’t feel their necessity at all and pay a hefty amount as fine later. MS-Office is one such example that people don’t care to purchase.
What to do: A lot of formalities and checks should be made beforehand to avoid such common startup mistakes. Keeping track of these formalities after consulting an expert can help you with this.
16. Ignoring your Interest
Trends and interest may get contradictory sometimes. Ignoring one of them may lead to a decline in business. A technology enthusiast may not get into the food business just because it has a good scope.
What to do: Try finding out ways to put both the things on the table. It would require creativity, and things will start happening. A technology enthusiast may not sell food items, but he/she can develop an app to manage food inventory, restaurants, and similar stuff.
17. Failing to Work on your Weaknesses
Weaknesses are in everyone’s face. One shouldn’t neglect this thing as it may teach you a lot of stuff that no book or internet article can. Only you know about your weaknesses and instances when your business was on a bet. Wrong decisions are not always the outcome of wrong planning; it might be because of aggression, laziness, resistance, reluctance, etc.
What to do: Try noting down your weak points. It could be as small as waking up late in the morning to as big as signing a deal just to let your competitor feel bad. A good business or entrepreneur never mind what others are doing, rather he/she observes everything and use as learning for own development