Even if you’re certain that your business idea is a sure-fire winner, success is never guaranteed as a start-up. There are just so many things that can go wrong – however, many of them are avoidable.
Many new business owners fail because of the same issues. This list of common mistakes will help you improve your chances of success by avoiding some of the obvious errors that can kill your company before you’ve even managed to get it off the ground.
1. Wasting time on things that don’t matter
When you’re launching a business, it’s important to make sure that your product is perfect and your branding is just right. You need to get a winning strategy in place and hire the people you require to implement it – and to make it all happen, you’ll need some capital too.
But as Peter Czapp, founder of The Wow Company, points out, it’s important not to get bogged down with all these details. ‘Of course, brand, offering and strategy are all important, but not as important as making it happen’. Remember that there’s no point having the perfect offering if you’ll never be in a position to actually offer it to anyone.
2. Not putting enough effort into the business plan
Many new business owners try to get by with minimal planning, perhaps because they believe their product is so wonderful that selling it is a no-brainer. Sadly, this flawed thinking is likely to result in failure. An important part of planning for your business is establishing whether there’s a demand for your product and identifying target customers, which requires research.
Having a detailed plan in place doesn’t mean that you have to be rigid when implementing it. In fact, rather than hindering your ability to react to changing circumstances, starting off with a solid plan will help you succeed while being flexible because it forces you to consider all the possible outcomes before you start.
3. Micro-managing instead of delegating or outsourcing
According to Paul Halliwell, founding MD of TalkTalk, many start-up founders spend too much time fine-tuning aspects that are nothing to do with the strengths and passions that led them to start the business in the first place.
Paul advises founders of new companies to ‘focus on what makes your business you’, adding that ‘most founders hold onto admin or non-core activities for much longer than they should – it’s often the case that a bookkeeper or marketing agency could do the job better and cheaper, whilst freeing up the founder for really making the difference.’
4. Failing to prioritise marketing
With so much to do in a new company, it’s easy to forget that ultimately, you’re trying to sell a product or service. To achieve this, you need to get the word out and create demand. Peter Czapp explains that trying to sell your product or service to potential customers is the best kind of market research you can do: ‘if you want to find out what someone really thinks about your product or service, ask them to buy it’.
Alyssa Gregory, founder of Small Business Bonfire, says that creating SMART goals can help you keep track of where you are in relation to your targets while giving you a sense of progression. Peter Czapp adds, ‘it’s really important to maintain focus and energy around sales – set simple targets and hustle to achieve them.’
5. Not having diverse enough revenue sources
When you’re just starting, you’ll probably be happy to have any customers at all. Then, after a while, you’ll likely find that certain clients come back for more. Depending on your line of business, you might be tempted to settle into a routine rather than continuing to look further afield.
Having one single client that keeps you afloat is great, but as serial entrepreneur Dave Lavinsky points out, it’s important to have multiple sources of income that are diverse enough to keep you going if you lose one or more of them.
6. Ignoring criticism
If you’ve got a great product or business idea, you know it’s going to work. You can feel it in your bones, and nothing anyone can say will change your mind. Assuming that everyone is as passionate about your idea as you are can be dangerous however, as this can lead you to ignore constructive criticism or advice about what you need to change – even if it comes from someone with the experience to know what they’re talking about. Being able to take criticism, and act on it, is an important learning experience that will help your business flourish in the long run.
Don’t get your head stuck in the sand
Most of the biggest mistakes you can make as a start-up business owner are things that with hindsight, should have been pretty obvious. Where you might go wrong will depend on the mix of personalities in your company, and as a result, many of the items on the list above contradict each other to some extent.
Maybe you ring the changes too readily in response to things going pear-shaped, or perhaps you’re too unwilling to try something new. You might be focusing too much on the bigger picture, or devoting too much energy to the nitty-gritty. Either way, you’re likely to get by just fine as long as you’re able to take a step back, apply a little common sense and listen to advice from the people who ought to know.