Research conducted by the US Bureau of Labor Statistics revealed that around 20 percent of new businesses fail during the first two years of their operations. Similarly, around half of all new businesses don’t survive after the fifth year of operations.
These studies prove that running a startup business isn’t a piece of cake, instead, it requires a considerable amount of effort, time, and money. Are you too wondering how to save your startup business from failing? Don’t worry, we’ve got you covered!
We reached out to some of the growth strategists, legal experts, and financial advisors for compiling a list of common 6 mistakes that startup businesses should avoid for staying away from failure, and enjoying skyrocketing sales.
#1 Lack of Planning
Benjamin Franklin once said that if you would fail to plan well, that means you’re planning to fail.
It is no secret that poor planning is the number one mistake that leads to business failure. This is because a lack of planning means that you’re starting a business blindly, and still hoping that things will turn out to be smooth. But, that’s not always the case!
Apart from this, a lack of planning often means that your employees wouldn’t know what is expected of them, there wouldn’t be any defined business goals, thus causing wastage of resources. Still not convinced why planning should be the first and foremost step while you’re starting your own business? Here’s what you need to know:
- Poor planning leads to unsatisfied customers because your business fails to meet their expectations in the form of late deliveries, unanswered complaints or return requests, etc.
- A lack of planning means that you haven’t assigned a designated budget to any of your projects, thus leading to wastage of money.
- Poor planning means that your business lacks a clear focus and direction, thereby hurting your brand image, and turning customers away.
Due to the infinite drawbacks of ineffective planning, many businesses have started rethinking strategic planning so that they can survive in the rapidly evolving markets and cater to the changing customer needs.
So, if you want to save your startup from failing, you should set aside some quality time and invest it in creating a thorough business plan that has realistic goals defined for all your business areas. This is because, according to the US Census Bureau, businesses that have a business plan succeed better than those that do not have one.
#2 Unable to Understand the Needs of Your Target Audience
If you’re a wise businessman, you’d know that understanding your audience is the golden rule to success. Do you know why? This is because your target audience has the power to make or break your business. The products and services that you offer should be designed by keeping in mind the needs, characteristics, attitudes, and emotions of your target audience, so that they can prefer your products over other alternatives available in the market.
On the other hand, businesses that fail to account for the needs of their audience, they are either unable to create products that appeal to the prospects, or they are unable to market their products effectively.
Therefore, if you want to achieve business growth, and ensure survival, you should strive to know your audience, and learn about their motivations, goals, pain points, behaviors, and challenges.
#3 Trying to Manage Everything Yourself
Many growth strategists have identified that the lack of delegation and expertise of entrepreneurs make them suffer in the form of curtailed business growth. Therefore, it is critical to note that if you want your business to succeed, you can’t do everything on your own. Instead, you should hire the required expert people for every business area.
Wondering how to stop being the Jack of all trades? Here are a few tips that can help you avoid this mistake:
- Rely on external company audits for an unbiased financial evaluation of your business.
- Learn to trust your team, and let them do their work so that they are motivated to fulfill their designated goals.
- Listen to your employees as they might come up with better and more creative ideas as they are closely working with the customers.
#4 Unable to Leverage Digital Marketing
A study revealed that US digital marketing spend will go up to $120 billion by 2021, thereby making digital marketing a significant part of the brands’ marketing efforts. Besides this, digital marketing offers tremendous opportunities to businesses of all scales – be it a two person startup or a large multinational for engaging prospects and existing customers. However, the key is to leverage the right set of digital marketing tools to better connect with the target customers.
Experts believe that many startups fail because they don’t understand the importance of leveraging digital marketing techniques for reaching out to their target audience. Still not convinced why you should make digital marketing one of the top priorities of your startup? Have a look at the numbers yourself!
- According to a study conducted by the MDG Advertising, around 70 percent of internet users want to learn about products via content compared to traditional means of advertising.
- Research conducted by IBM discovered that 55 percent of buyers conduct research through social media.
- According to Statista Research, each consumer spends around $1800 every year on e-commerce.
These studies evidently show that if you would fail to incorporate digital marketing in your overall marketing strategy, then your business would fail to attract the desired audience effectively.
#5 Saying No to New Technology
Past studies reveal that many new businesses fail because they are unable to cope up with the changing technological needs of the market. The well-aware and informed customers of today always look for trending products, and they prefer to stay updated with technological advancements.
Besides this, we see a new business entering the market every now and then, thus making the market landscape intensely competitive than ever before. So, if you want to make your product offerings, and branding messages stand out, you should incorporate the ongoing technological trends and advancements.
Apart from this, the new technology can provide you with better ways of running your business, and improving operations. All said and done, it is true that new technology can be difficult to learn at times, however, the inability to incorporate it might hurdle your business growth altogether.
#6 Lack of Confidence
By now, we know the most common reasons behind why startups fail. However, another important factor could be the lack of confidence in your business plan or product offerings. This is because if you wouldn’t believe firmly in your business idea, you wouldn’t be able to convince your audience to love it.
So, if you want to take your startup business to the next level, you should have confidence in the feasibility of your business idea. This is because your positive attitude will help you perform better, and connect with potential partners and customers successfully.
The Final Words
All said and done, it is significant to remember that you can’t make your business successful overnight. Instead, achieving business growth and increasing sales require a lot of hard work, patience, and consistency.
So, if you want people to look up to your startup business, you should plan well, and avoid committing the above-mentioned mistakes.