Top 6 startup mistakes to avoid from the very beginning

Dr Biz • August 27, 2020

Avoiding startup mistakes isn’t easy. It’s well known that around half of new businesses don’t make it past the first year of trading, and it’s not surprising: it’s tough out there! Making ideas a reality is not as simple as it might first seem: it takes hard work, dedication and a willingness to lose sleep for at least the first few years. Success is, however, entirely possible. While many startups end up on the scrap heap, some make it all the way to the top, with Singapore’s new mobile-technology leaders Grab and Lazada shining examples. Below we set out some of the top mistakes to avoid to keep your startup dream alive.

1. Under preparing for the challenge

As mentioned above, launching a business can be tough. Yet, while many new owners know this, they fail to properly prepare themselves for the challenge ahead. Caught up in the excitement of their vision, entrepreneurs don’t adequately plan for the impact that launching a business will have on their lives. Typically, this means long days and late nights, as well as disagreements with co-founders and challenges finding and keeping loyal, motivated staff. In the beginning, most new owners feel like Energiser bunnies, but as time wears on, the battery drains. Make sure you are mentally, physically and emotionally ready to take on a big workload over a sustained period.

2. Going to hard, too fast

One of the most common startup mistakes is to throw too much time, energy and money at the project in the early days, which will quickly lead to burnout. The money point is particularly important. Many entrepreneurs come out of the startup stalls with a “more money, the better” mentality. However, as one wise man once said: “mo’ money, mo’ problems.” Investment is easy to find in the current pro-startup environment, yet taking all the cash on offer is not always wise. Some of the most successful entrepreneurs start small, taking their time to try and test their product or service with small groups before rolling it out. This is also a better long-term growth strategy than over stretching yourself with high overheads from the start.

3. Giving away all your power

Another pitfall with accepting too much investment too early is that, usually, founders will have to forfeit a large chunk of their own share of the company. This is not only potentially devastating if the firm makes it really big, but could also lead to short-termism if larger investors are more concerned with turning a quick profit than growing the company. Those that have given large amounts of starting capital will likely have significant sway in the management of the firm, meaning you might find yourself unable to fulfil the vision you have worked so hard to make come true.

4. Not getting good help

This might seem contradictory to the above, however: not having the right expertise on hand in the early days is among the biggest startup mistakes. This is especially true when it comes to the smaller administrative tasks that can take up a lot of time, but are not a driving force of your business’s growth and development. Make sure you have an experienced, trusted partner on hand to help with professional services such as registering your business, managing company secretarial and - most importantly - accounting. These are the types of expenses not worth skimping on: the last thing you need is for a filing or tax mistake to derail all of your hard work. Check out Dr Biz’s service page for more.

5. Sticking too firmly to the plan

Anyone giving you good advice will tell you that all startups need a business plan, and the more detailed, the better. While this is absolutely true, it is important to remember that rules are made to be broken. We live in a fast moving world in which change is coming increasingly thick and fast. For startups especially, this means staying open and flexible to adjustments to your products, services and business model. In a few short years, target audiences can change their preferences entirely: as we all did for music and television consumption, for example. Being ready to adapt to these changes is crucial to the success of a startup - if not all businesses.

6. Hanging on too long

While being flexible and adaptable is important, though, one of the final key startup mistakes to avoid is not having an end-goal in mind. Coming back to our first point that starting a business is a big (and tiring) challenge, having an exit strategy at least roughly planned out is advisable. For some startups, this might come quite early on – with the first big bid for the company, for example. For others, there might be a specific growth or profit target they want to hit before walking away and taking a well-deserved holiday. Whatever success looks like for you, make sure you draw a line in the sand, because – trust us – you’ll need it!

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