Twelve mistakes that all start-ups should avoid in order to be successful
Half of all start-ups have disappeared within five years of being founded. You should do your utmost to avoid the following things, thus ensuring that your company is among the 50 percent that survive.
1. Forgoing a business plan
A good idea can get a company off to a successful start, but it's very rare for it to lead to long-term success. Detailed analyses of the market, the competition, and the risks can identify weak points at an early stage. You can find valuable support for drawing up a well-developed business plan, which is also indispensable when raising capital, at startups.ch.
2. Employing the wrong people
It’s all about people. It's people that make a company. Smart company founders employ people who are smarter and more capable than they are themselves. They also look for a good mix in their team in terms of gender, age, and personality.
3. Entering the market too soon
Is the product sufficiently developed? Is the price competitive? If not, it is worth devoting more months to research and development. People who ignore this tip risk having dissatisfied customers – or even none at all.
4. Entering the market too late
These entrepreneurs mostly spend too much time in the project phase. By the time they finally take their first step into the market, someone more audacious might already have put the idea into practice and established themselves in the marketplace.
5. Not planning the launch sufficiently
Imagine that everything goes exactly as you would wish: The product is a hit, and you are inundated with inquiries and orders. But are you up to this challenge? Delays in delivery and poor customer service can be fatal for a start-up.
6. Neglecting investors
The greatest danger here lies in neglecting private investors who are close to the founders. People who provide money want to be informed about what is being done with it. Start-ups should provide information on their own initiative, invite their financiers to visit them, and communicate regularly about their progress. Working like this is not only polite, it will also create trust and make it more likely that the investors will assist on another occasion. Professional investors generally regulate the extent of their involvement themselves with a contract from the outset. But here too, entrepreneurs are recommended to go beyond the contractual agreements and actively foster contact.
7. Neglecting customers
If customers fail to materialize, you will have no need for investors either. That's why it is most important to focus on customers. Even the most prestigious awards for innovation are of no use if customers are dissatisfied, don't buy your products, and therefore do not recommend you either. The key to having satisfied customers lies in a flawless product and in fast and friendly service.
8. Neglecting employees
Keep your employees on board, update them about all the important steps, and give them responsibility. However, don't expect as much from them as you do from yourself: Anyone who assumes that all their employees will share the founder's enthusiasm for months or even years will probably face high fluctuation rates.
9. Losing sight of the big picture
It is a challenging task to keep administrative control of fast-growing companies. To prevent your company falling prey to chaos, it is worth employing one or more people at an early stage to create order and structures.
10. Becoming over-confident when the first money starts to flow in
You are feted by the media, awards are received, money starts to flow in. Now is not the time for over-confidence! Do all your employees really need to fly with you to the trade fair in the US and stay in that high-end hotel? Strict budgetary control is essential in this phase too.
11. Factoring in too little liquidity for growth
Are you prepared for a sudden influx of orders? Suppliers' invoices often have to be paid before the proceeds from sales have been received. This can create serious difficulties for a young company with no reserves, or delay its growth, which is particularly important especially at the start. One solution is what is known as factoring, which you can use to improve your liquidity situation.
12. Neglecting yourself
You're thinking about your employees, your customers and your investors? Excellent! But what about you? For a few months, there is nothing wrong with not having time for anything else and devoting yourself heart and soul to the young company; family and friends will mostly put up with that too. But in the long term, you have to think about yourself too. Ideally, you should block certain times for yourself from the outset – and then stick to them.
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