The seven deadly sins of start-ups

It is a true but uncomfortable fact of business life that as many as four out of five start-ups end in failure.business-failure_thumb[5]
Why do start-ups fail?  Here are the seven deadly sins of start-ups. Make sure you don’t make the same mistakes.

1. Failure to develop products that meet a critical need.
It’s one thing to develop technology that does something cool, perhaps something that’s never been done before. It’s another matter to deliver a complete product that meets a critical need better than the competition. This means developing the entire package – hardware, software, infrastructure, sales channel, promotion, customer service.

1.Failure to develop products that meet a critical need.
It’s one thing to develop technology that does something cool, perhaps something that’s never been done before. It’s another matter to deliver a complete product that meets a critical need better than the competition. This means developing the entire package – hardware, software, infrastructure, sales channel, promotion, customer service.

2.Failure to plan.
Meticulous planning is key.  You need to make a realistic business plan complete with action plan. You need to set targets against which you can benchmark your business. This will enable you to make informed decisions about what to do next.

3.Failure to measure.
Many start-ups have little or no idea what the key numbers in their operations are. You need to measure every step taken in actual numbers. This includes the steps that haven’t yielded results. Many valuable lessons are learnt from mistakes.

4.Failure to keep track of the cash flow.
When it comes to start-ups cash is king.  You need to keep a close eye on expenditure and watch credits carefully. Expenses can easily get out of hand unless you follow a rigorous accounting discipline.

5.Failure to be flexible.
Many start-ups think of their initial concept or vision as being cast in stone. You should be passionate about your idea but also open to change as the dynamics of the marketplace may dictate. Obstinacy may turn out to be a costly mistake.

6.Failure to avoid going solo.
Being solo or a single founder may give out the wrong signals. It may be considered a vote of no confidence (the fact that even your family and friends don’t have enough confidence in your venture to pledge their support). You need at least one trusted colleague to brainstorm with you. He or she can talk you out of risky decisions and can also cheer you up. Low points when they come are really low for start-ups.
You could even consider a suitable joint venture. Working with another business could help cross-sell products and services that complement one another.

7.Failure to put your whole heart into the venture.
When it comes to start-ups a half-hearted effort is a sure way to failure. You can’t have a full-time job as well as a start-up. You need to take the risk; have enough faith in your venture to take the leap.

 

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