JOHANNESBURG - Having built a business from the ground up, it’s hard to see it fail.
According to Allan Gray Orbis Foundation, SA, only 15% of startups make it through their first year.
The other 85% fail due to various reasons. One of them is the mistakes that startup founders make. If you want to beat the odds and keep your business afloat, you must have already read a great number of articles on the subject matter. Yet, it never hurts to brush up on it, and you might learn something new.
Here are some common yet overlooked mistakes that startups tend to make:
Lack of market research
Startup founders often forget to do their homework — research the market. So, instead of venturing into the unknown, remember to know the answers to the following questions. Is there a demand for your product? What features should it have? How can you gain an edge over your competitors?
Taking too long to launch
Planning for too long can be a waste of time — initial thorough research should be enough for launching, and further tweaking of the product should come after receiving some natural feedback from customers.
Not having a roadmap in mind
Develop a core strategy and an implementation plan. It will make your business less vulnerable and more prepared for market challenges. You can always fine-tune it later as you learn more about the market and your customers.
Not focusing on a select group of customers
Spreading your efforts over each and every possible customer can result in serving all of them poorly. Instead, focus on a select group. Create a buyer persona by answering the questions: where do they live, what age are they, where do they work, what are their hobbies? This knowledge will empower you to create an effective promotion strategy.
Failing to provide customer onboarding
If your product needs onboarding, be proactive. Prepare a decent introduction. Between two similar products, customers are prone to stay with the one that was supported better. Write thorough instructions and offer several channels for customers to connect with you.
Applying a standard approach to each customer
Be a keen communicator and try to get on the same page with every customer. This will help cultivate a long-lasting relationship with them. Alexa Lemzy, Customer Support person at TextMagic, adds, “You can get to know your customers better by incorporating short surveys into your onboarding process”. Indeed, two or three multiple-choice questions and one open-ended one can go a long way towards helping you learn more.
Hiring before you’re ready
Some entrepreneurs make the mistake of hiring a big team from the outset. But then it appears, their startup hasn’t earned enough money to pay those employees. Make sure you hire people only after you know you can afford them. In the beginning, you should only bring in specialists there is a pressing need for.
Not re-evaluating the employees for the current business needs
Regular employee performance checks are crucial — are your hires showing the expected results? The same is true for the team — do you meet their expectations as an employer? If not, think together what can be changed. Otherwise, it might be a good idea to part ways.
Chasing a perfect digital brand image early on
Creating an online presence is never a bad idea unless you plan to spend a fortune on it. At this stage, it’s better to pour the funds into business development. You can start by listing your startup online and then work on digital promotion later after you’ve acquired some customers and asked them to leave a review.
Not developing a marketing plan
Your startup objectives, pricing strategy, SWOT analysis, budget — all of this should be meticulously laid out in your marketing plan. In the early stages, your budget is going to be tight, so allocate your resources wisely. Don’t treat it as a be-all and end-all document either. Tweak your marketing plan as your revenue grows, or the target audience changes.
Pouring the budget into growth hacking
Growth hacking means acquiring new customers with aggressive techniques like paid advertising, media coverage, and the above-mentioned digital brand image. While businesses in the later stages of development are more likely to afford it, startups can’t. It is possible, but you’ll be spending all of your funds on growth hacking. Creating hype around your startup with media coverage can be helpful, but where will you get the money to invest in building a healthy business model? Paid advertising is also not a remedy. Think about organic advertising for instead.