Startups can be a troubling endeavor for far too many business people, even if those entrepreneurs are overly adamant in working hard to succeed. Despite different pitfalls to these businesses, people don’t stop trying. Startup rates have been burgeoning the last few years, even as the failure rates become all the more depressing.
What mistakes are those startups possibly making? You may think you have everything figured out when starting a business, yet ducking reality is where many of the common mistakes are found.
Lack of Focus on the Realities of Success
It’s easy to sit and dream of a business and assume it’s marketable. In the abstract, the idea of selling a product you know will solve a problem seems like a worthy dream that could work like a charm. As long as you focus on one thing and build on it, your chances increase much more. The problem is that far too many don’t focus on one thing first, says Crain’s Detroit Business. When you sell multiple products or offer too many services, you lose focus on something you can build on. Also, customers may get confused on what your real vision is.
The Problems of Borrowing Too Much Money
While lack of business focus may top financial issues, there’s far too many problems with money to list. One of the worst in the latter case is when a startup borrows too much money and then can’t pay it back due to weak sales in the first year. Investing in inventory can be a real challenge, though it can be approached in a more streamlined way by deciding if you really need an item or not. By looking over your inventory list and eliminating things you may not really need right away, you’ll already shave off possibly several hundred dollars on the loan money you need.
Having Enough Money to Cover Expenses
This connects to the borrowing element in that you need enough money to meet expenses at the beginning of each month. If you come up short, being in debt is only going to put you into a slippery slope that you may not recover from. That’s why you need to have enough money at least three or four months out in order to cover expenses in the event you come up short in profits. The same applies to receivables because of how long it takes some customers to pay back when using credit cards.
Communication Issues with Staff or Customers
Trying to communicate a vision to others in your staff can be a major concern for a startup. When you’re all working together, you have to have a singular vision that everyone can agree upon. Everyone also needs to know their specific role of what they need to do meet a certain goal. If you don’t all meet and make that clear on a daily basis, a startup is going to fall apart fast.
In other cases, too many divergent opinions can end up confusing that singular vision. You have to whittle down opinions into something workable and not take the advice from everyone around you telling you how to run things.
This all extends to your customer base and being able to sell them on a singular vision they can relate to and help support. When you look at the most successful companies in the beginning, they all focused one simple thing that helped solve a problem for a certain demographic. Growth wasn’t attempted until they found success with this one vision first before expanding into other products or areas.
These are all things to think about, even if they may seem obvious when first opening your doors. Because not everyone does them, ambition can sometimes be blinded by too much of what’s in our heads rather than dealing straight on with business realities.