Most start-ups fail to survive more than a year or two after their launch. In most cases, failure is not the result of a flawed business idea. Instead, the problem lies with the way a business is handled. A variety of factors come into play to make any business a money-making machine. Similarly, there are several factors that contribute to a business’ failure.
The following outlines the startup mistakes that can inch a business closer to failure. Read on.
Insufficient Idea Development
Start-ups don’t fail because the business idea is awful. Rather, they fail because entrepreneurs don’t plan the business before putting the waters to test. Regardless of how earth-shattering an idea is, without comprehensive planning, it is almost impossible to secure success.
An entrepreneur should take time to work on every single aspect of the business idea. This will not only reduce risks significantly, an entrepreneur will also be more likely to make the best decisions.
Marketing is a support system for start-ups and is more than just an ad in the yellow pages and a business card. It takes time to build an effective marketing campaign from scratch. The equation is simple. Marketing translates into sales and sales translate into success. Start-ups fail because often this crucial marketing factor gets ignored.
Poor Financial Management
At the end of the day, a business is all about profits. No profit is synonymous to no business. By keeping your books in order, an entrepreneur can win half the battle. A mistake is to rely on someone else to maintain the books. Unless and until you understand how you are doing financially, you cannot make efforts to further improve things for you. Maintaining cash flow, especially in the initial stages, is even more important as you need to figure out if you have enough cash on hand to expand your business.
Ineffective Web Presence
In the technologically sound society we live in, if you aren’t on the web, there is a large audience you are not reaching. A simple website won’t suffice. You have to market it and take every possible measure to attract a few more customers. Remember, the idea is to create mass awareness. If people don’t see you, you don’t exist for them. Web presence is so important that an unimpressive one can bring the biggest industry giants down on its knees.
Relying Too Much On Professionals
It is a great idea to hire professionals to do critical tasks such as accounting and marketing. However, leaving everything up to them is wrong. It is your business and it is your duty to keep a check on whether or not these professionals are performing up to their capacity. When you trust professionals too much, they may forego the little details. Eventually, your choice will backfire and you will find that your start-up is moving towards failure.
Make sure you do not make the mistakes listed above as such blunders are often paid with insolvency of business.
About the Author: Mark is an International business consultant for offshore companies. He mainly works in countries with lower tax rates like Cyprus, Malta and BVI