By Abhi Golhar, nationally syndicated radio host & keynote speaker
Starting a business is a huge step toward financial freedom. However, it requires a lot of energy, time and resources. Since all three can be costly, it’s important that the results are worth it, but this isn’t always the case.
The good news is you can learn from the mistakes of those who came before you. By avoiding common startup mistakes, you’ll increase your chances of seeing a solid return on investment as you get your business off the ground.
1. Choosing Misaligned Investors
Depending on the needs of your business, finding investors might be at the top of your list in the early phase. Investors can inject capital to help you start, run or expand the business. Some even assist in decisions involving the company.
The first big mistake that some startups make is failing to look beyond the money. Locking down a partnership with capital may feel like it fell from heaven, especially if it’s just the amount you need to run your company. However, there’s more to it than the funding period.
Avoid the frustration of overexpecting only to have the investor underperform. Be clear on the value and role you want investors to play. Do not mistake common interests for common vision. The investor may be interested in your business idea, but might not share in your vision.
Choose an investor that suits both your money needs and the needs of your business.
2. Rushing into the Hiring Process
Let me start by saying that it’s difficult to hire and retain employees -- even for successful businesses. I’ve noticed that many startups rush into hiring employees as soon as they are able to, thus spending more time on hiring than on developing the startup itself.
While employees provide a lot of value in the workforce, I recommend sticking to a minimal number until your startup is stable.
In addition, many startups businesses tend to go for low-cost employees. The idea is to minimize cost, but sometimes low-cost employees equal low-quality work. Invest in your employees. I've found that investing the time and capital to ensure our employees have the best know-how has been a crucial element to our success.
3. Building an Ineffective Team
Hiring isn’t always the issue -- sometimes performance is. Don’t make the mistake of choosing team members based on availability rather than skill. An ineffective, unaligned team will spell failure for your business.
When building a team, choose individuals with varying skill sets and those who share in the same common values of your business culture.
4. Following Advice Blindly
In the early stages of launching and managing your business, you will feel the need to consult. That’s a wise choice, but -- and there’s no polite way to say this -- not every piece of advice should be followed.
Just because something worked to build one business doesn’t mean it will work for yours. Don’t follow advice blindly. There’s a myth that advice from an investor is always right because they put in their money. Ask for advice, but research and question it before implementing.
5. Skipping the Planning Phase
Some startups begin with an idea, immediately followed by action. This is a recipe for failure. Planning means everything to a startup. There are three plans to focus on before starting your business: the business plan, the financial plan and the marketing plan. Failure to do any of these may result in your startup’s doom.
Skipping the planning phase will end your business before it even starts. Make sure to assess market potential and research the business idea. This will ultimately make the execution phase easier.
6. Putting the Product First
You might be thinking, “What? I thought putting the product first was the way to go.” I’m here to tell you that your customers should come first -- before your product. Have an idea of who your ideal customer is, how you can find them and how they will react to your product.
Putting customers first will ensure you aren’t off base when it comes to developing your idea, designing the product and packaging, and marketing to your target audience. If you sell children’s books, for example, put the children first to write at the appropriate language level and create illustrations suitable for their age.
Save your energy, time and resources by avoiding these six major mistakes. The road to business success will be smoother without these potholes -- watch out for them.
Abhi Golhar is a 3x nationally syndicated radio host & keynote speaker. He helps companies scale and make more money faster. AbhiGolhar.com