A lot of startups launch with great hopes only to fold shortly after opening their doors. In fact, 60% of startups only survive up to three years, while roughly 35% make it to 10 years, according to a study by the U.S. Bureau of Labor Statistics and the Ewing Marion Kauffman Foundation.
There are many steps involved in starting a business, from budgeting to hiring and everything in between. One seemingly harmless mistake can crack the foundation of your business and cause it to crumble over time. Instead of turning into another sorry statistic, set your business up for success by avoiding these five all-too-common startup mistakes:
1. Going in Blind
The biggest mistake entrepreneurs make is not performing enough market research. Understanding the ins and outs of the industry you plan to enter is important for many different reasons. Besides identifying potential customers, market research helps you to set realistic targets, examine barriers to enter, uncover competition, and more. To cut down on research time, contract the help of a third-party data provider, like D&B Hoover, that offers detailed industry reports.
2. Underestimating Marketing
It’s common for new business owners to hastily hire salespeople to push their products and/or services. To make sales, however, you first have to create demand, which is where marketing comes into play. Take time to develop a comprehensive marketing strategy that focuses on generating brand awareness. Make sure you have plenty of marketing collateral, such as product sheets and white papers, to pass onto sales.
3. Foolishly Spending Money
More often than not, entrepreneurs have to operate using whatever personal savings they have and the little money they are able to borrow from others. Don’t blow your shoestring budget on things that you can do for a low cost or free. Instead of paying a high-priced PR agency, for example, spread the word about your business through low-cost digital channels, like email and social media.
4. Trying to Win Everyone Over
Appealing to the largest number of buyers so you get the maximum exposure might sound like a good idea; however, when you try to be something to everyone, you end up being nothing to anyone. Find out who your ideal buyers are and concentrate your efforts on building relationships with them through targeted marketing strategies.
5. Hiring Too Quickly
As your business starts to gain momentum, you may find yourself in desperate need of new team members. Don’t jump the gun and hire the first candidate who walks through your door. Carefully outline what skills and character traits you’re looking for and find an individual who not only possesses those attributes but understands and believes in your company’s vision.
Going from startup to an established business takes a lot of careful planning. Avoid setting your new business up for disaster by avoiding these common mistakes.