Akshay KR Singh tells you that starting a business is difficult and a start-up even more. Therefore, it is important to avoid certain pitfalls
Starting a business is difficult. launching a start-up is even more so. Attempting to build a company from the ground up, many entrepreneurs have little prior experience in the business world. Even when they have an awesome idea, complex problems arise like managing the young enterprise, handling finances and hiring employees on a budget. Mistakes and entrepreneurship go hand-in-hand. Even with meticulous planning, you are bound to make mistakes. Some will make you a better entrepreneur while others will flat out ruin your business. Knowing which ones to avoid beforehand can save you a lot of time, money, and heartache. Below are some start-up mistakes to avoid.
Business entity concept
Keep your personal and professional life separate. Your business should not affect your personal life and vice-versa. Never let your personal life affect your business. A successful entrepreneur knows how to keep his personal as well as professional life separate.
Think money is the answer
Struggling entrepreneurs often think that if they can just raise another round of financing, their problems will be solved. But money doesn’t work like that. If your business model isn’t sound, throwing money at it is not going to work. You have to fix the problem first, and then raise the money. Doing it the other way around will only get you in more trouble.
Don’t be afraid to fail
The biggest mistake you can make is to be afraid of failure. Failure is the key to your success. How you pick up after failure and learn from your mistakes is the key to great success. Change the mindset. You didn’t fail —you ran an experiment that will improve your next business. Although it hurts a little bit each time, now you’ve learnt something, and you can apply that lesson to move forward.
Ignoring your customers
When you have a solid business plan that looks good on paper, it’s easy to get carried away with implementing your idea that you forget the most crucial part of your business: Your customers. Start-ups that make this mistake end up with unfavourable results since customers are the backbone of every company. If you want to stay out of the list of start-ups that fail, you need to put as much focus on meeting the needs of your targeted customers as you do with implementing your ideas.
Have a sound business plan
Having a solid business plan plays a vital role in determining future success. A business plan, after all, serves to guide the start-up in the right direction by answering the following questions: What is the purpose of the companyIJ Who are the potential customersIJ What are the missionIJ What’s the direction desired for the companyIJ Who are the company’s competitors and what are they doingIJ How can the company measure successIJ
A sound business plan determines every aspect of the start-up. Whenever the company is stuck or a new venture is to be launched, refer to the business plan. There’s no need to go creating a business plan in as formal a manner as someone would in business school. But having a business plan is recommended since it will help determine the company’s direction over the long term.
Not paying for expertise
The biggest mistake an entrepreneur can make (and most do) is to believe that, just because they are an expert at what they do, they have what it takes to run their own business. Find an expert whose job is to know exactly what you need to do.
Hand money incorrectly
One of the biggest mistakes is spending too much, which may occur when a business owner or founder becomes overly eager and hires a lot of people. At first, the entrepreneur may believe all the new employees are needed. But this will just mean burning through the start-up’s finances faster. To avoid this, hire those only those truly needed.
A founder may be tempted to blow through a lot of cash quickly, spending on unnecessary expenses. As an entrepreneur, it’s easy to fall in love with your business idea and fail to understand or appreciate the economics. To avoid mistakes in your planning and launch, entrepreneurs must start off with a clear P&l and cash flow plan that details what your business metrics need to be in order to survive in the short and long term. Without proper management and use of its finances, a new business may never set sail. Be sure that someone good with numbers can help out with this.
(The writer is CEO and Director, Wishbells)