Starting a business is an exciting endeavor, but it can also be a daunting one. With so many things to consider, it's easy to make mistakes that can have serious consequences. Here, business owners and industry experts share some of the most common mistakes that startups make and tips to avoid them. One of the most frequent errors that entrepreneurs make is getting started without a comprehensive business plan.
Objectives guide you and keep you on track during daily operations, so it's essential to ensure that your goals are SMART. This means that they should be Specific, Measurable, Achievable, Relevant, and Time-bound. By making sure that your objectives are SMART, you can identify where you want to go and describe the specific action steps needed to achieve them. Another mistake that startups often make is not setting long-term goals.
While most startups and growing companies set short-term goals (monthly, quarterly, annual, and perhaps also 2 to 5 years) to measure their progress, they often don't define long-term goals either. If the long term isn't clearly defined, your short-term goals may end up being the wrong ones. Long-term goals are often overlooked in startups for reasons (or excuses) of agility, but if you want to move fast, you need to know where you're going. You have to be able to make quick but intelligent decisions.
And this requires a clear sense of direction. Defining a big, ambitious, and bold goal (BHAG) that you set for the next 10 to 20 years can help you achieve it. Thinking that the random growth your startup is experiencing is a major trend is another mistake that CEOs and executives of expanding companies make. Startups shouldn't underestimate organic marketing, and this is often the biggest mistake a startup can make. For example, the website is blocked because they have only acquired enough bandwidth for a small volume of traffic, orders are delayed because they don't have enough staff to process them, there is a shortage of inventory because the startup company didn't anticipate demand, etc. When you find gold and you find yourself in the middle of a period of rapid growth, it's easy to fall into it and that's where mistakes are made, such as losing focus as a company, not setting the right goals, hiring too quickly, or neglecting the finances of your startup.
Let's take a closer look at some of these errors, as well as the solutions to recognize and overcome them in time. This will allow you to quickly assess if your startup is on the right track, as well as to deal with potential problems more quickly.Brian DeChesare of Breaking Into Wall Street adds: “The worst mistake a startup can make while experiencing rapid growth is betting too soon on an idea, a product, or a set of products.” Startups should always take their time when making decisions and not rush into anything without doing their due diligence first. Expecting communication to evolve naturally with growth is another false assumption made by many startup founders. Customer retention is just as important (if not more so) for constant growth as acquisition, so startups should always invest in customer service at the same rate they invest in sales. One of the most common mistakes companies make in the start-up phase is that they expand prematurely. As a result, if they don't receive up-to-date market feedback, startups will fail during the rapid growth phase.
Over the past decade I have personally helped thousands of startups and midsize companies in the market move from one phase to the next. One of the best preventive measures you can implement is to create a panel with all the most important KPIs of your startup. Startups must also consider the increased IT and communication needs that come with scalability, along with the typical capacity requirements that come with scalability.