Business management of a start up? Here’s our list of 10 classic cases of failure to learn if you are thinking of opening an activity!
What are the main causes of failure which generally may experience a start up? Let’s find out right away with analyzing in detail the following examples: 10 more or less egregious mistakes that young companies entrepreneurs should never commit.
# 1 – Offer products or services of little interest
So that you can embrace a business management projected growth, it is important to invest time and money only in products and attractive services for a significant proportion of consumers: if the audience is not in the least attracted by the solutions offered by our business, the possibility that the same amp and developments are reduced drastically.
# 2 – Relying on partners and associates with different ideas too
Anyone who wants to do business with the goal to make it prosperous and profitable must necessarily pay attention to the choice of members and employees to be included in the team. Having different points of view in a workgroup can be an important resource; but if the ideas, objectives and approaches are too far apart enhances a strength can turn into a time bomb. Open a means to share common goals, aspirations and ways to achieve them.
# 3 – Do not prove sufficiently aggressive and determined
When it comes to doing business, having an aggressive and determined attitude (in a business) it is often what makes the difference between those who achieve their goals and those who do not come even close. We can all try a little ‘antipathy toward very aggressive or pushy vendors, but often it is these that knowing wisely how far to go manage to close his business impossible. Waste and the doors closed in his face must be able to respond effectively, avoiding to become demoralized and keeping in mind the goal.
# 4 – Do not consider the time needed to raise funds
Since (in most cases) to start a business need of considerable economic resources, it is appropriate to consider the time required from the start to the collection of funds : contact investors or venture capitalists, and convince them to fund a business project is not a simple thing, but by programming the goals to be achieved in the short and long term (within one month to tighten the first agreement, within 2 have a sum X, etc.) the difficulties are greatly reduced.
# 5 – Do not be able to make correct estimates
If the founder of a business fails to make estimates about the future that are able to be acceptably accurate and concrete, you stand to lose substantial numbers of more or less money, when for example you are to assume the public response towards of a certain product or service, you must be able to recognize the line between what we desire and what we can realistically achieve. the classic beginner’s mistake is to believe its so quality and unique offering that every potential customer is only attended coming, this without even considering other offers on the market, the loyalty of customers to existing products or services, the pricing, the location (in the case of physical exercises) etc …
# 6 – Do not have a long-term vision
A good rule to follow when it comes to opening a task is set even before the start of the objectives to be achieved in the short, medium and long term: real goals that allow the entrepreneur to make their business grow gradually and steadily, developing it as much as possible both internally (choosing an appropriate office, new hires, etc..) and externally (customer acquisition, advertising, etc.).
You may also like to read another article on BSOinvest: Business: 5 tips for not starting badly and fail miserably
# 7 – Spending too much money in risky products or services
If, especially in the start up phase, the holder chooses to invest a lot of money on items or services not sufficiently tested and validated by comparison with the market, is likely to be at not being able to handle a potentially damaging negative return for the entire business: first to allocate considerable sums to “innovative” or “non-conventional” products or services, it is important to ensure that the same work and affect our target. For this purpose it is preferable to initially invest a small percentage of the energy and funds available for testing and as allocate a growing effort if the feedback is positive.
One of the most famous models performs this rule to perfection: 70/20/10 model for innovation in the business.
This model requires that the effort in the work should be divided in the following report:
- The 70% of the time / money should be devoted to core businesses (those that “pay the bills and the rent”).
- The 20% of time / money should be devoted to projects related to the core business (low-risk investments because they develop and improve the existing).
- The 10% of time / money should be devoted to projects unrelated to the core business (high-risk investments as far away from the core business and innovative).
# 8 – Propose too similar products-services of other vendors
The correct company management provides (among other things) the ability to produce solutions that on the one hand (as already said) involving the public and on the other are not the exact copy of the offer others. An article identical to that sold by a competitor already known in the market can only attract if it is much more convenient to the income level (in this case, however, you run the risk of devaluing the products, getting more miserable gains and unleashing a destructive war downward ). The best compromise is to be able to balance the important factors such as originality, usefulness and price.
# 9 – Underestimating the importance of steady growth
To open a business with the aim of turning it into a successful company must focus every day on its growth: in the first period after creating a good customer base, it is therefore important to continue to focus on aggressive strategies to expand the loyal audience while increasing earnings and expansion possibilities. Often good times can lead to “sit” or to invest too many resources in non-growth activity, but such development. The continuous growth although slow is one that will pay the development and that will protect the business in times of crisis.
# 10 – Relying on the wrong investors
To ensure prosperity to a certain business is necessary for the founder to find on start up the right financial partners: they are able to understand their role as lender (the social capital cannot expect to intervene in technical questions if you do not has jurisdiction), who understand the business (there is nothing worse to explain to a person who does not understand your business as you’re spending your money) and that they are able to understand the payback period and are agree with the repayment plan.
This is our list of 10 examples of the failure to learn from more or less common mistakes that young entrepreneurs should avoid committing to ensure the established companies more successful.