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Marlena Stoddard
Marlena Stoddard has written 4 articles for SB Informer.
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Startup Snafus: 4 Common Mistakes and How to Avoid Them

Marlena Stoddard

July 19, 2016


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As the owner of a startup, you have many challenges ahead of you. Starting with limited financial and human capital, you must find a way to convince customers to buy your product while also convincing investors to support your vision. While your job is hard enough already, it can be made even harder by making one or more key mistakes along the way.

 

You Focus on Networking More Than Executing Your Vision

Networking is a critical component of running a startup. Without the right contacts, it can be hard to find people to invest in your business, buy your product or help you increase visibility for your brand. However, too much networking can be bad for business. This is because you will be spending too much time talking about your products or services instead of actually creating them and actually entering the marketplace.

 

You Spend Too Much Money on Employee Office Perks

Millennials love to play foosball or watch television while they work. They may even enjoy getting a snack or a soda from the vending machine in the break room. This doesn't mean that you need to splurge for new equipment when a used soda machine will do just fine. While providing some recreation my actually increase worker productivity, you don’t need to blow the budget on playthings. Buying a new instead of used is really just a waste of money—a used vending machine will dispense drinks and snacks just as well as the brand new one will. You will not win over a client or a new hire simply based on the quality of your vending machine or recreational activities. New companies need to be extra careful with their capital, and it is unrealistic to think that they will see an impact on profits or revenues based on how advanced their break room is.

 

You Spend Too Much on Launch Parties and Other Events

Having a launch party is a great way to bring together your employees, founders and customers together to celebrate a milestone for your business. Unfortunately, some startup owners spend too lavishly on the event and may lose money or even bankrupt the company in the process. Instead of a glitzy night at a casino or hiring the most expensive caterer in town, it may be better to simply have a virtual launch party hosted online that others can participate in from their own homes. Alternatively, a local party house may offer reasonable rates to hold a launch party that meets your needs without blowing your budget.

 

There Is No Business Plan or Vision for Growth

The odds are good that you don't want your company to remain in the startup phase forever. However, it can be difficult to grow the business when there is no plan in place to scale it. It can also be difficult to convince investors to get on board if they don't know how they will get their money back. Before you begin operations, make sure that there is a plan to scale or an exit plan in place if you want to sell the business at some point. Otherwise, you and your founders run the risk of stagnating or being undercut by the competition because of a lack of innovation. A lack of vision could also lead to squabbling among ownership, which could lead to the business dissolving or ultimately failing to reach its potential.

Starting a business can be the best way to control your career path and create financial security at the same time. Although you get to make the decisions as to where your company goes, make sure that you spend wisely and have a plan for the future. Doing so increases the odds that you make fewer mistakes that could derail your company despite your good ideas.


                   



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