I think you\u2019ll agree when I say: running a business is not for the faint of heart. It\u2019s as challenging as it is risky, which explains why about 90% of startups fail long before they break even:<\/p>\n\n\n\n
\u201cIn 2019, the failure rate of startups was around 90%. The research concludes 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year.\u201d – Investopedia<\/em> Over 627,000 businesses open each year according to Chron<\/a>, which means we have a serious problem here ladies and gents. I mean, where are we – as entrepreneurs – going wrong? In other words, why do so many startups fail before fruition? Are we lacking creativity and imagination? Don\u2019t we have the skills and the mettle to build businesses that drive the future? As a business owner myself since 2011, I have had my share of challenges. My biggest problem was always customer service because of my bad temper, and poor communication. Over the years, I have learned my lessons and made improvements. As I write this piece, I\u2019m on the verge of launching a new startup, so I had to do some research for my own good. And in today\u2019s post, I\u2019m sharing my findings for posterity\u2019s sake and as a note to myself as I go into this new business that I just mentioned. I hope you find a nugget or two of wisdom to help you take your business to the next level. If you love the findings I\u2019m about to share, please hit up the comments, and let\u2019s talk. With that preamble, let us get down to business. Before we get into the meat of the article, here are some reasons why some startups fail long before they even begin<\/a>. Some startups (aka products\/services) don\u2019t get out the door because:<\/strong> Now that you know why some startups (and oh, by the way, what is a startup<\/a>?) never get off the ground, let us segue into the different areas in which startups make mistakes and some strategies for preventing them. We can all use all the help we can get. Why? Business is a tough world. There are competitors, too, to oust, and uncertain economic conditions to weather. You need the toughest of skins. Here are four common startup mistakes to avoid and make your work easier. Arrrgh…legal stuff isn\u2019t fun unless you\u2019re a lawyer. Filling all that paperwork and paying huge fees? It\u2019s not fun. But don\u2019t let legal issues become the lion barring your way to success. You don\u2019t want court sermons when you\u2019re trying to run a new business. You don\u2019t have to be in the soup because you didn\u2019t pay interns, for instance. Also, legally protect your intellectual property before sharing your ideas. Additionally, if your business doesn\u2019t comply with laws and regulations, you\u2019ll face the music. The worst mistake you can make is operating a business without legal counsel at all. That\u2019s simply insane considering problems that need legal redress crop up all the time without notice. Also, take your contracts seriously, and abide by GDPR rules, among others. When you\u2019re writing your business plan and looking to the future, your eyes are gleaming with hope. You\u2019re setting out to create something remarkable and make a killing while at it. You chart your path with all manner of graphs and stats. You can\u2019t wait to grow your business, scale massively and play in the big leagues. But hold your horses, amigo. Scaling too fast is actually bad for your business. What you need is gradual but sustainable growth. Not fast, errant and unsustainable growth that crushes your startup. Additionally, you need a solid foundation to support scaling. If you lack the infrastructure and resources to scale, going big is tantamount to shooting yourself in the foot. Build the foundation first, and only scale when you can handle the pains of growth. As you build your scaling machinery, ensure you\u2019re hiring only the best and necessary talent. I once hired 10 people. Long story short, I fired 8 after running into losses. That, my dear friend, is known as poor hiring practices. Don\u2019t fall into the same trap – hiring hundreds of employees doesn\u2019t translate to more money. While at it, ensure your growth is in tune with current market trends. Inflexibility will lead you nowhere. It doesn\u2019t foster growth. So, learn to update your strategies with new information to take advantage of modern-day opportunities. Customer is the king they say, and I agree 100%. No matter how splendid you swing it, if you don\u2019t have a single customer, you don\u2019t have a business. If you\u2019re to build an empire, you must invest in customer service wholeheartedly<\/a>. If you don\u2019t know where to start, I would recommend you check in with your customers regularly. In the past, I have won repeat business simply by saying \u201cHello, how are you doing?\u201d So, follow up with customers already and thank me later. One other area that we fail miserably is organization. Having poorly organized customer records make it hard to track customers throughout the sale funnel. Without enough and ordered insights, you cannot provide great customer service. Invest in CRM software<\/a> early on. Also, why would you run a business without a customer service protocol? If customers cannot reach out, you won\u2019t gather important feedback. Without feedback and analytics, growth will remain a pipe dream. Last but not least, we have financial mistakes. It\u2019s no secret that many startups collapse because of financial mistakes. The startup cannot afford to stay afloat because there is literally zilch money to keep daily operations going. For starters, don\u2019t use one account for personal and business funds. That\u2019s a rookie mistake and things tend to get ugly down the line pretty fast. Instead, create separate accounts for your business. Additionally, avoid bad accounting practices (e.g. poor bookkeeping), and missing due dates for tax filings. The two mistakes are quite expensive in the long run. Many businesses have long closed down due to bad bookkeeping and tax evasion charges. Note that there is a difference between \u201ctax avoidance\u201d and \u201ctax evasion.<\/a>\u201d What are your thoughts? Let us know in the comments. I think you\u2019ll agree when I say: running a business is not for the faint of heart. It\u2019s as challenging as it is risky, which explains why about 90% of startups fail long before they break even: \u201cIn 2019, the failure rate of startups was around 90%. The research concludes 21.5% of startups fail in […]<\/p>\n","protected":false},"author":29,"featured_media":3521,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[22,117],"_links":{"self":[{"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/posts\/3520"}],"collection":[{"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/users\/29"}],"replies":[{"embeddable":true,"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/comments?post=3520"}],"version-history":[{"count":1,"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/posts\/3520\/revisions"}],"predecessor-version":[{"id":3522,"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/posts\/3520\/revisions\/3522"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/media\/3521"}],"wp:attachment":[{"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/media?parent=3520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/categories?post=3520"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/startupxplore.com\/en\/blog\/wp-json\/wp\/v2\/tags?post=3520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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<\/p>\n\n\n\nTop 4 Key Startup Mistakes You Must Avoid at All Costs<\/h2>\n\n\n\n
<\/p>\n\n\n\nLegal Issues<\/h3>\n\n\n\n
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<\/p>\n\n\n\nGrowth and Scaling<\/h3>\n\n\n\n
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<\/p>\n\n\n\nCustomer Service<\/h3>\n\n\n\n
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<\/p>\n\n\n\nFinancial Mistakes<\/h3>\n\n\n\n
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