You might have heard the worrying statistic that 75% of all startup businesses fail. Chances are it’s really putting you off from trying to create your own business. One of the main reasons that these companies fail is that they all make the same mistakes. Here are five mistakes every startup makes and how to avoid them.
#1 Choosing Partners and Co-Founders Way Too Soon
Before you decide to go with a partner or co-founder spend some time with them. Going into business is just the same as going into a marriage and things quickly get messy if you don’t do some research and discover something you don’t like about your potential partner. Here are some of the things to ask yourself about every potential business partner:
- Do their skills and views compliment your own? Could you be someone greater if you work with them?
- Can you reasonably spend 14 hours a day with them for two years? Could you sit next to them on a long flight? Will your relationship be 100% professional or will you attempt to form a friendly relationship with them too?
- Do you have a vesting schedule? Are you both taking on the same amount of equity?
#2 Being Reluctant to Fire Bad Employees
A bad employee can quickly make everything worse for the whole company. They can damage productivity and morale and make good employees bad employees. The time that you spend trying to deal with them is time that could be better spent running the business.
Don’t delay dealing with the issue and come up with a timeline in which people can either correct their behavior or be fired. People don’t change their habits often so don’t be afraid to fire them. You should be cordial about it though. If they part on good terms it can be better for everyone in the long run.
#3 Not Trusting Your Gut
Understand that no one is as passionate about their company than an entrepreneur. Because running a business can feel like being blindfolded entrepreneurs tend to trust people who have gone before them. Everyone needs to follow a different path though. Your journey will not be the same as someone else’s and what worked for them may not work for you. Listen to experts, sure, but don’t forget to listen to your gut and follow your own plans and visions.
#4 Going With What’s Good Enough
Things move fast when you start up a business and it leaves you feeling pretty tired. So you go with what’s easy rather than what’s right. You settle for good enough. You need to keep going until you reach the ideal. You don’t need to reach perfection but you shouldn’t stop just because something is good enough. Nothing is perfect but something can be perfect for you. Strive for that level of perfection.
#5 Not Caring Enough About Revenue
Revenue is, and should always be, the number one goal. It is the lifeblood of a business and you need to come up with a way to consistently make a regular profit. You should never let hype get in the way of revenue. While you can use hype to create revenue it’s beyond the point. Getting good press, awards, and page views are the means to an end and that end is revenue. Stay focused on earning money rather than spending it building hype.
Have you created a startup business? What mistakes did you make and what did you learn from them? We’d love to hear about them!