If you’re in the start-up or business world you’ll have heard the same old statistic..“80% of businesses fail within their first year” – most through making common start-up mistakes! Yet even with those odds we still take our shot and swing the bat in a quest to become one of the small minority of company owners with a thriving business. Good for you if you’re one of those people! Without entrepreneurs taking their shot, the UK would look like a very different place. Small businesses employ 48% of the British workforce. But with all that being said if you’re about to embark on one of the most challenging journeys of your life, you’ll want to be prepared. So here are some of the biggest mistakes founders make, if you can avoid these you start to swing the odds in your favour.
Make a Plan
I know, I know. People always say this. But if you’re not a planning person it can fill you with dread! Sitting down to write out every… single… little… thing that could go right or wrong. YAWN?
Plans never… erm go to plan anyway.
But something is better than nothing…
Finances, customer audience, marketing plan, responsibilities are a good starting point. Get at least a broad plan of action down. You can’t steer the ship if you don’t know where you are going.
Confront the Reality
Tough one this because as an entrepreneur you tend to be optimistic anyway right? But when you’re in business sometimes you have to confront the harsh truth about the situation to survive.
- Is this strategy working?
- Will you have enough money?
- Is this new hire working out?
- Do you have enough margin to make the business feasible?
You need to have the complete and utter belief that you will make it, but at the same time being self-aware enough to face any challenges head-on. It’s such an important quality to have as a founder.
Bury your head in the sand and you’ll simply fail. Don’t be a “head in the sand” founder…
Don’t Be Afraid to Pivot
This one does depend on your sector of course! If you’ve started a burger place on Deansgate pivoting to a Chinese buffet might not be so simple… But joking aside, most start-ups are solving a problem, we tend to think that our solution is the perfect answer, but in reality, it’s probably not. It might be close or it might be way off the mark. When you approach the business from a perspective of “I’m going to solve this particular problem” rather than “My offer solves this particular problem” you allow yourself to pivot and adapt to what the market wants. Rather than forcing your solution onto the market. There’s a subtle distinction… solve the problem even if that means ripping up months of work. Don’t let the sunk cost fallacy influence you.
- YouTube started as a video dating service!
- Starbucks started off selling coffee machine and beans!
- Suzuki sold weaving machines to Japan’s silk industry!
Don’t Do It All Alone
In the early days, you wear all the hats, CEO, CTO, COO, CFO and cleaner. You simply don’t have the resources to hire. But trying to do everything alone is tough, surrounding yourself with the right people as soon as you can is key to success.
There are two main groups of people you need.
- Having great mentors and advisors to sound ideas and strategy off.
- Great people to take on responsibilities.
Shameless plug alert but a good accountant can not only take the burden of tax off your shoulders but can also be a great source of business and strategy advice. 🙂
Don’t be afraid to seek mentors and advisors to help you strategise. Similarly, get comfortable with delegating and offloading tasks to others. Whether that’s a first hire or a freelancer. One of the challenges of being in business is time… the sooner you can free up your time to work and think about the most important tasks the quicker you’ll make good progress.
It’s too easy to go on a spending spree at the beginning. Especially if you have a chunk of investment. A big office, branded goods, new tech, a hiring spree… But you’ll need more capital than you think. Be careful about where you spend your money. It might seem like a good idea to spend. You can always justify any expenditure by framing it as an ‘investment’ but the businesses that survive are ones that have the cash reserves to deal with all eventualities. So be mindful of your spending. Ask yourself “Do I really need to spend this now? Can it wait?” These are some of the biggest mistakes that startups make. If you can avoid these major ones you have a fighting chance! Good luck.