90% of the startup fails — says Small Biz Trends based on research.
Each year thousands and thousands of startups pop-up in the market. Some of them succeed whereas some of them fail. They start their business and want to be like Mark Zuckerberg and create a billion-dollar company. Easier said than done.
As stated earlier, over 90% of the startups fail. Such startups fail because either they are doing it wrong or committing various mistakes as the journey of their startup begins. Mistakes are part of the journey but lamenting over those mistakes is the biggest blunder of any startups.
So you must be asking yourself — how not to start a tech company? If you are reading this article, then either you have just started your journey or you are planning to start one. So, what are the mistakes a startup owner makes when starting their journey?
Also, check out our article How to start a tech startup?
Lack of a Business Plan
Most of the startups fail because of the lack of a business plan. If you are starting your business without any goals and vision, then you are walking in a never-ending road without a destination to reach.
A business plan is your company’s future — a roadmap to success. The business plan outlines what you want to do and how you are going to do it. This is the first thing you need to decide before starting a startup. The plans and strategies you are developing and the decisions you are making, everything is guided by your business plan.
A business plan provides insight on steps to be taken to grow the company. The business plan outlines the company’s goals in the coming years and steps to take to achieve such goals.
For a tech founder — he/she wants to make his/her company the best in the world, for a poor farmer — he/she wants to grow crops and earn enough to provide basic needs to his family. Everyone has their own goals and objectives that drive them to work. Likewise, you need a business plan that drives you to achieve your goals and objectives and make correct decisions for your company.
Just outline the best decisions and strategies for your company.
Lack of Workflow
Workflow simply means the flow of the work. You need to define the workflow, a process of how things should be done. Without any proper workflow, everything will fall apart.
What do you do when you have to hire someone? Do you hire him/her immediately or do you first see his/her CV, invite him/her to an interview, and make the decision either to hire or not? Your obvious choice is the latter. Likewise, everything needs to be done in a flow and a process must be defined.
What will happen if the Sun does not rise as always? You don’t want to imagine, right? The Sun also has its own process to rise every morning. So, workflow or a process, this is how our modern world works.
Workflow ensures the way how everything is completed or done correctly and milestones are achieved. Likewise, your company grows, your team grows, and you need the workflow to manage your employee, delegate roles and responsibilities, and ensure that every task is completed correctly. You need a business plan to go smoothly as planned.
You just need to define the best workflow that works for your company.
Without Proper Capital
“How to start a business without any money?” — you can see many articles on the Internet with such titles. But to tell you the truth, you need to have a certain capital to start a business. You don’t need to have a huge capital, but you will need some money to operate your business.
Even before starting your business, you need money for registering your company. You also need to think about the lawyer in case something comes up and then there is the tax amount you need to pay.
You need to understand how much capital is needed to keep the company running. You need to understand the financial requirements otherwise, your company could go bankrupt leading to the shut down of your company.
You should also control your expenses. Spending too much can bite you back hard. You won’t have enough money left to operate your business.
Sometimes, it’s hard to control expenses. You might be running out of money. For such cases, you need to at least have reserve cash in case of emergency.
No Prior Experience
It is not necessary for you to work for someone else, gather experience, and then only you can start your own business. We can see many startups that started early and still are successful. Like Facebook, developed by Mark Zuckerberg when he was a college student. Today we all know about Facebook, which is one of the biggest social media platforms.
This shows you don’t need to work for someone else to start your own business. But, not everyone can be like Mark Zuckerberg. In this competitive world, you need to have some experience to start your business.
It’s not like you need years of experience to start a business. It’s confusing, right? So, let’s clear the confusion.
You can still start your startup even if you don’t have any prior experience. You can look up to a mentor who can help you start your business. He/she should be experienced who can give you advice on making decisions in different situations. He/she will help you avoid mistakes that could be fatal and expensive for your business.
You are in a field where technology and trends can change anytime. In such a situation, your mentor can give advice on adopting the best technology and trends for your company. If you are stuck somewhere, he/she will help you solve it. He/she can be an invaluable advisor for you and your business.
Having even a little experience will be a plus point for you.
Focusing on Money, not Useful Product
If you are thinking of starting a business just to earn money, then don’t start one. Although everyone starts a business for money, everyone won’t just keep thinking of money, money, and money only. There are people who put customers and service before money.
You need to understand that customers are important for you to earn money. Create useful products and see how the money will follow you. Focusing only on money is already a bad idea for you to start a business.
You need to understand the user’s needs and requirements and create useful products that people will love. You can’t build products without understanding the users. Even if you have developed a product without any research on the user’s needs, people won’t be able to accept it, because you haven’t considered their needs and requirements.
Why people will love your product when it doesn’t solve their problem? Total waste of money, time, effort, and resources.
Customers are the soul of any business that motivates every business to work harder. Customer satisfaction should be a top priority for your business and money itself will follow you.
Building Without Testing
No one is perfect in this world. Mistakes are part of life. They can occur at any time. But, not correcting the mistakes purposely is the biggest mistake of your life.
Likewise, even a small mistake in a tech company can be disastrous. More coding and more sleepless nights for you. So, testing in each step is important.
Software without bugs and errors might not be a good sign. You will never get to know the underlying major problem that might hit you hard in the future. So, bugs and errors are part of the software.
We do testing to be on the safe side. But building software without testing could be dangerous and expensive for you. You need to build test cases for each software and test the software based on those test cases.
Similarly, customer involvement is also a major factor in making software errors and bugs free. This will help you sort out the problems and improve the software.
Lack of Marketing Plan
It would be a total waste of time, money, effort, and resources if you failed to launch the product in the market. The main aim of developing a product is to let the users know and use it. What is the purpose of your product if users don’t know about it?
You have a product but if users don’t know about the product, then how can your product generate sales and add value to your business? Marketing can help your business grow and expand your customer base not only locally but globally as well. It will help you to draw more potential customers to your business.
So, how can you market your product and business? There are various methods to market your business and product. Like content marketing, email marketing, social media marketing, search engine optimization, and so on. These mentioned methods need some effort but are the most effective marketing strategies.
Lack of Interest, Determination, and Hard Work
There are no shortcuts to success. You need to have a strong determination and hard work to make your business successful.
Most of the startups fail because of the challenges faced by the owner. He/she doesn’t have that determination factor to face any challenge and feels like stopping whenever he/she faces problems.
The business environment is full of surprises. There are many ups and downs in the business cycle. You need to know that there comes a time when a business goes through a rough time and you need to face such time with a smile.
Likewise, you need to start your business in the field of your interest. You will be filled with energy and excitement when working on your interested field. You will develop a strong “I can do this, I can face any problem” feeling.
You know Steve Jobs, right? He was fired from Apple but he had the determination and he worked hard so, later he was again given the position of CEO in Apple. See where Apple is now. It was his interest, determination, and hard work that never let him lose hope.
Failure is a part of life. You should accept this fact and be determined to make your business successful.
Without the Right People
You are starting a startup. But, can you run and manage your company alone?
It’s very difficult to run a company alone. Having one or two people that support you will help to lift pressure from you. You need to have the right people around you to develop positivity in you.
It is impossible to handle every function and tackle every problem alone. So, having people alongside you will help you to find ways to solve problems. You can have a co-founder who will help you start a business and grow the business together. This way, your burden will be halved.
Likewise, you need people who will work for you. You need to hire the right people who will think of the company as their second home. They need to have “together we will face the problem” attitude. The environment of the company with such people will be much livelier and fun to work on.
You need to build the right team for your startup. And your company will grow in no time.
We, Truemark, will help you to start your startup if you are having any trouble. We will help you provide the right people that will help you grow your business. Please, feel free to contact us if you need any help.
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References: Adioma, PaulGraham, InCorp