6 Most Common Startup Mistakes for an Entrepreneur to Avoid

 

There’s nothing as painful as pouring your heart, money, time, and energy into a business idea only to have it fail within a few months of operation. Unfortunately, this is the sad reality for a large percentage of startups.

If you’ve just started your company and are still highly optimistic about your chances of striking it out on your own, take heart in knowing that failure can be avoided by simply learning from the mistakes of entrepreneurs who came before you. If you avoid the mistakes of your predecessors, you increase your chances of success. Here’s a list of some of the common mistakes that kill startups.

#1: Not Validating a Business Idea

Failing to validate a business idea is the number one mistake that most novice entrepreneurs make. In 2014, Fortune conducted a survey in a bid to find out the various reasons why 9 out of every 10 startups fail. Lack of a market for products/services, which accounted for 42% of the polls, was cited as the number one reason for business failure.

Validating a business idea is one of the important ingredients for success. This allows you to find out whether your venture will be feasible, if there’s a market for your products, and what impact current trends in your industry would have on the long-term viability of your business.

#2: Going at It Alone

If you take the time to study the history of successful businesses (whether large, small, famous, or infamous), you’ll notice that they have one thing in common — more than one founder at the time of launching. Very few startups with one founder ever make it. And this is because starting a business requires a lot of work that may prove to be too hard for one person. One or two extra people may lessen the burden and therefore increase chances of a smoother launch.

Having a partner is also a good business strategy on its own. When alone, it’s easy to focus on one way of doing things and fail to notice other better ways of performing business tasks. This makes a second brain and an extra pair of eyes and ears an invaluable thing to have around. The two of you can brainstorm for smarter and better business strategies, talk each other out of stupid decisions, and even encourage each other during tough times. Having someone onboard also makes you accountable. Do you really need to spend 80% of your budget on beautifying the office? Your partner might flip a table at you and save you from financial ruin.

#3: Lacking Enough Capital

While there’s no surefire way of succeeding in the business world, having enough capital to get you started can significantly increase your chances of success. Unfortunately, a majority of startup entrepreneurs are not aware of this and try going into business using savings or money from family and friends. While personal funds can help you avoid the costs that come with taking on loans, studies show that most successful businesses have taken and benefited from outside funding at some point. So, don’t be afraid to take loans from investors. The trick is to only borrow enough money to take your business to the next step. Borrowing too much money brings its own set of risks that can drag you down.

#4: Selecting the Wrong Investors

When seeking outside funding, a majority of startups make the mistake of rushing into a partnership with the investor who offers the most start-up capital. However, it’s important to remember that all money is not equal when it comes to outside investors. Some investors bring money to the table as well as useful insights that can help grow your business. Other investors only cause you a lot of headache by interfering with every aspect of the business, making it difficult for you to run the company. Therefore, make sure to look at the value beyond money that an investor will bring to your business.

#5: Rushing to Hire

Every startup needs workers on the ground quickly to help manage the various aspects of the business. Unfortunately, in a bid to acquire this much needed help, entrepreneurs tend to rush the hiring process and thus end up doing themselves more harm than good. The rush to hire usually leads to two common mistakes:

  • Hiring employees too soon when part-timers are the more sensible approach.
  • Focusing too much on the credentials of candidates and forgetting to find out if a candidate has the proper attitude to make him/her a good fit for the company.

These are two hiring mistakes every entrepreneur should avoid to minimize risk of failure. Hiring too soon can cause you to lose a ton of money while hiring the wrong fit can lead to failure. So, only hire a permanent employee when it’s absolutely necessary. Be sure to also vet the personality of all candidates before giving someone employee status.

#6: Ignoring Your Customers

When you have a solid business plan that looks good on paper, it’s easy to get carried away with implementing your idea that you forget the most crucial part of your business: your customers. Startups that make this mistake usually end up with unfavorable results since customers are the backbone of every company. So, if you want to stay out of the list of startups that fail, you need to put as much focus on meeting the needs of your targeted customers as you do with implementing your ideas.

Mistakes and entrepreneurship go hand-in-hand. Therefore, even with meticulous planning, you are bound to make mistakes. Some will make you a better entrepreneur while others will flat out ruin your business. Knowing which ones to avoid beforehand can save you a lot of time, money, and heartache.

Author Bio:

Uyo Okebie Eichelberger headshotUyo Okebie-Eichelberger, Serial Entrepreneur, Wife, Mom and Duke MBA, has successfully built a seven-figure empire in the maternity industry with You! Lingerie and Preggo Leggings, two leading designer brands of chic maternity/nursing intimates and apparel cleverly made for fashionista moms.

The former Kraft Brand Manager and her brands have been featured in several publications and TV shows like The New York Times, Glamour Magazine, Cosmopolitan, The Huffington Post, CNBC, The Today Show, E! News, OMG!, The Daily News UK, Pregnancy & Newborn, American Baby and Fit Pregnancy.

Currently, Uyo Okebie-Eichelberger’s brands are sold online and in over 120 stores in North America, South America, Europe, Australia, Asia and Africa. Uyo Okebie-Eichelberger recently partnered with the world’s largest retailer, Walmart.com to launch an exclusive line of maternity/nursing lingerie called Love Xoxo by You! Lingerie.

She shares business tips on her blog: www.UyoOkebieEichelberger.com

Follow her social media pages on Twitter: @UyoEichelberger and Instagram: @Uyo