9/10 new businesses fail. In most cases, the failure has to do with the process the business uses to go live. Here are 5 tips to start...
A sad but true reality is that 9/10 new businesses fail. In most cases, the failure has nothing to do with the products, services or founders. It has more to do with the process the business uses to go live.
From launching a handful of successful startups and helping others do the same in the last 3 years, I've learned quite a bit about creating businesses. From mentoring young entrepreneurs and holding advisor positions in a handful of startups, I quickly started seeing a trend of common mistakes many people were making.
I took note of these errors and decided to write this article. Here are 5 tips to startup smarter:
1. Stop Assuming
The most frustrating thing I have witnessed while working with startups is that many of them assume everything. Questions such as what to name their product, who will buy it, how much to price it, and what to build are assumptions most new business owners make on their own.
I quickly learned from starting my own businesses that my own opinion didn't mean anything. Businesses build for customers while hobbyists build for themselves. Unfortunately, hobbyists don't really make money building stuff.
There are actionable steps you can take to find the answer to just about any question. It's called idea validation. You take an idea or a set of questions and ask a group of people. You note down their responses and use actual feedback to make decisions within your business.
2. Hard Work Cannot Be Substituted
No matter how hard you try, you cannot substitute hard work. Instead of looking for other people to do your job, step up to the plate and do what's best for the business. Many companies fail solely because the team isn't willing to put the commitment in that is required.
Bringing on partners is great if they can compliment or assist you with your goals, but they shouldn't be replacing you. As a founder, you're the most vital asset to the business and you should only create a startup if you're willing to put the time in.
3. Start Small, Scale Fast
When I started my first multimedia business, I didn't invest a single dollar out of my pocket. I also didn't have investors or loans that helped me get started. I truly started with $0. Instead of trying to create a large operation out of the gate, I started small and scaled fast.
In the beginning, it was just a freelance developer and I. After proving the business model and bringing in cash flow into the business, I decided to scale the company by hiring others. At the peak of my business, I had over 15 employees working for me.
Once you nail it, you can scale it really easily. Businesses make too much money and end up going bust because they scale before nailing their model.
4. Get Help From Mentors
Good entrepreneurs learn from their own mistakes while great entrepreneurs learn from the mistakes of others. If you could save months of time while getting proper guidance, why wouldn't you take it?
Getting help from mentors, advisors and consultants is a great way to rapidly grow your business. You can get someone with years of experience backing your ideas while pointing you towards the right direction.
Most startups fail because they lack the proper guidance needed to be successful. They end up being all over the place and eventually end up being flat broke.
5. Master One Thing At A Time
I've seen great businesses collapse simply because the founders wanted to grow too quickly. It's great to get some traction and cash flow, but why leave a good thing for something new? Many startups have different ideas for products or services they wish to offer.
Instead of waiting and creating a long-term plan for their ideas, they immediately jump to it. The side of the business that actually generates cash ends up getting neglected while the new products and services end up sucking all the cash flow. Be weary of growing too quickly!
Author Bio: Jeet Banerjee is a 21 year old serial entrepreneur, digital marketing consultant, TEDx speaker, author, blogger, and startup advisor. He launched his first business in high school before selling it two years later for a profit after growing it to 15+ employees. From there, Jeet has launched a handful of startups through which he has been able to impact hundreds of thousands of people.