No matter what business sector you are in, or the number of startups already in that business, no two companies are the same. However, one common thing that plagues a lot of startups, no matter their field, is the fear of failure. The fact that an estimated 90% of startups fail is enough to want to avoid the mistakes most of them made. As much as passion is important when starting a business, passion alone will not get you across the line. Here are some mistakes every startup business should avoid.
- Not Knowing Your Target Market
It is one thing knowing what product you offer, and quite another thing, knowing who exactly you are aiming to sell it to. Failing to identify the characteristics and demographics of your potential client can cost you a lot of time and money in terms of ROIs (returns on investments) and overruns. This is because you will spend a lot of time, money, and energy advertising to the wrong people – that is, people who are not interested in your product.
- Failing To Create A Marketing Plan
Marketing is everything, as it can determine the success or otherwise of your business. Most startups either fail to create a marketing plan or simply create the wrong plan. One of the worst mistakes a startup business can make is investing a lot of money in ATL (above-the-line) advertising right from the start. Even if you have enough money to afford it, it is best to start with something much less costly, like social media advertising.
- Poor Branding
When it comes to branding, startup businesses need to be extra careful, as there are little things that can easily throw potential customers off. Create a positive brand culture that your target customer can identify with and stick with that culture. Also, ensure that every member of your team understands and operates in line with that culture. For example, if your business is in manufacturing, the quality of your packaging will attract customers. Instead of opting for low-quality material, opt for superior quality such as PPT rollstock right from the start.
- Not Having An Emergency Fund
Most startups do not break even until months or even years later. It is a grave mistake to think that you will not make mistakes that will cost your business some money, or that there wouldn’t be a lot of hidden costs along the way. Also, for the first few months that your business tries to break even, not having an extra fund to fall on can cost you your business.
- Avoiding Legal Agreements
New business owners usually tend to be very naive when it comes to bringing on new business partners or establishing collaborations, with most of them failing to legalize their partnerships with binding documents. This is especially true when a number of friends come together to start a business. Most tend to place friendship above the business, and thus, fail to establish clear legal relationships and documents with respect to shares, contracts, etc. Others also fail to pay attention to standard form contracts signed for every deal they make, either due to the excitement of landing a new client, or the fear of losing the client.
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