Navigating the seas of business as a startup can be challenging. Regardless, you can achieve success even if you’re in an innovative, fast-paced industry, but it demands proper planning. Still, some startup businesses with solid business plans fail to succeed in their early years of establishment. One way to be assured of success is by being mindful of startup business pitfalls. Read on to learn more about the common reasons that may cause startups to fail.
Marketing mistakes like failing to have an online presence are startup killers. If you want to build a client base, having a strong online presence is crucial. This involves building a strong social media presence and having a website.
As for the latter, you should ensure it’s mobile-friendly as this prevents a high bounce rate. Remember that 48% of people believe that if a website isn’t mobile-friendly, the business knows and overlooks the problem. When using social media as a marketing medium, ensure you provide your clients with relevant and regular content.
Poor financial planning and management are at the top of the list of reasons why most startup businesses fail. For effective financial planning, analyze your business and determine the areas that require more or less access to resources. Ideally, you should provide more resources to sections of your business that generate greater profit. It’s also important to create a cash flow forecast to help you remain at the top of your finances and better plan for short and long-term goals.
On your business journey, the two important pillars are your product and clients. A common problem with many business owners is that they don’t take client satisfaction seriously. Statistics show that 80% of businesses believe they’re offering exceptional client service, but less than 8% of the clients agree.
That’s why it’s important to know your clients’ real wants and needs and strive to fulfill their requirements. This may include analyzing your competition and offering competitive prices or discounts to attract them to your business. In doing so, you’ll create products and services that will offer them long-term benefits.
Legal issues are among the most overlooked causes of startup business failure. Depending on your industry, complying with the federal regulations and standards for running your business will prevent damage to your business reputation, affecting your bottom line.
If you’re in the tech industry, a legal issue you’ll likely face is intellectual property (IP) protection. It’s also advisable that you get copyright protection and secure trade secrets. Besides accounting for current regulations and policies, you should anticipate future changes. Doing so will improve your firm’s adaptability as legal requirements change continuously.
Running a startup business with a non-compatible co-founder is a recipe for disaster. If you and your business partner aren’t on the same page on issues within your business, it can result in unresolved issues and a difficult breakup. Studies indicate that about 70% of business partnerships fail, and you don’t want to be part of the statistics.
When searching for a business partner, the first thing to check is whether you have different operational strengths. For instance, a sales leader can help bring your vision to the market if you’re a product expert. You should also work with an individual you’ve worked with before and have the same overall vision. Don’t forget to be committed to telling each other the truth.
A startup business’s profitability largely depends on its employees’ quality. Some employee traits are universal, like problem-solving and people skills. But your top employees should have specialized skills if you’re to succeed as a startup. For example, they should easily develop creative ideas that ensure the business runs efficiently. In addition to having experience, they should be a great fit for your workplace environment and culture.
As a startup founder, the success of your business is dependent on proper planning. So, if you wish to have a partner, ensure you share the same vision. It’s also important that you hire employees who fit your work culture. A responsive and mobile-friendly website and visibility on social media channels are also key to startup success.