In 2019, 90% of startups failed. Every year that a startup remains alive, it beats worse and worse odds. Starting a startup business is hard. Cash is scarce, connections are hard to make, and it can feel like you’re all alone in the world.
The sad part is that these businesses fail for avoidable reasons. Want to learn more about the top seven mistakes startups make and how to avoid them? Read on.
1. Failing to Secure Adequate Funding
All startup owners know that funding is important, but not all know how to secure that funding.
When raising money for a startup, consider all your options. Many companies can help finance a startup, and not all of them have the same requirements or drawbacks.
You can procure startup financing through angel investors, bank loans, and even advance contracts. Research these and find which one is right for you.
When you do decide which one you want to pursue, hone your story. Getting your investors interested in your story is essential.
2. Not Knowing Your Enemy
It’s vital to know who your competitors are and what services they offer.
This is important to know for two main reasons.
First, if you know what your competitors offer and offer the same service, you can make sure that your service is better.
Second, if you know what your competitors offer, you can make sure that your product falls into a niche not occupied by them.
Too many startups try to compete with the big players in areas that are not easy to compete in.
3. Expanding Too Quickly
We get it. You’ve just started your business, and you want to expand as quickly as possible.
Ensure that you have an established product with loyal consumers before expanding into other areas. Your cash flow will pay dividends.
4. Not Taking Advantage of Technology
Many small startups find that they can’t compete with the giants in the industry.
One way to prevent this is by taking advantage of the technology available to you. Modern technology can even the playing field between the big established players and the startups.
5. Too Little Research
Sometimes, business owners become so excited about making a product that they forget to check whether consumers actually want it.
Always make sure that you are researching not only your product but also the consumer demand for that product.
6. Not Advertising Enough
Advertising is crucial to get consumers excited about your product. Even before you finish production, advertising can be helpful to let people know about what you are about to come out with.
If you don’t advertise enough, you can run the risk of consumers not knowing that your product exists.
If they don’t know it exists, they certainly won’t buy it.
One danger of advertising before you finish your product is that you could be tempted to include things in your advertising that you have not yet put into your actual product.
Don’t do this.
Consumers hate it when they feel that you’ve lied to them, especially if they think you’ve broken a promise.
This tip is essential if you are running a crowdfunding campaign. These consumers feel entitled to the thing they helped fund, not some other version.
Want More Guidance on Starting a Startup?
These tips are great places to start, but there are, of course, more mistakes that startup owners make.
Want more personalized information on starting a startup? Check out our Accelerator Program, that’s sure to help you successfully get your startup off the ground.