Did you know the U.S. has the highest concentration of startups? From Airbnb to Instagram, all these successful businesses once started as humble startups.
Funded by venture capital, startups are the backbone of the U.S. economy. ByteDance has the highest unicorn status and is valued at $220 billion. SpaceX follows in second position at $180 billion.
Interestingly and by his own admission, Elon Musk’s SpaceX nearly failed before a 2008 contract worth $1.5 billion was signed with NASA. From the start, Musk was determined to build a successful business by investing $100 million of his cash.
Not many startups are afforded the same opportunities. There are slim pickings out there. Unfortunately, about 90% of startups fail within the first year. But if you learn from others’ mistakes, you can succeed where they failed.
In our latest article, we’ll discuss five crucial mistakes to avoid in Year One.
#1. No Clear Business Plan
Your business plan is your company blueprint; your vision board. Without it, you’re just stumbling in the dark. Forbes says without proper research, you won’t know how to position yourself in the current market. Here’s where startups make the biggest mistake not paying attention to their business plan.
A business plan meticulously plots your goals, target audience and other strategies. Your plan should include marketing strategies, financial projections and long-term goals, especially if selling digital goods and your company relies heavily on eCommerce solutions.
Still not convinced you need an airtight business plan? Bplan cited stats from a study that found 71% of the fastest-growing companies have business plans. Constantly updating your plan will ensure you’re on track and it will give a bigger picture of how your company is performing.
#2. Not Investing in the Proper Tools
For staff to do a job well, they need procedures and checks. This encompasses the technology to ensure a growing, thriving startup.
Startups are now investing in SaaS platforms to automate processes, freeing up vital manpower. It doesn’t end there. Apps and software are explicitly made to accelerate growth. Something as simple as streamlining cross-border payments allows for a seamless customer experience, says PayPro Global.
Companies can then focus on building their product and audience by bringing the right SaaS or B2B SaaS partners on board. Invest in a platform that maximizes performance and delivers measurable results. Also, think about incorporating subscription management and rapid response into your online platform to ensure excellent customer service.
#3. Lack of Innovation
Henry Ford. Coco Chanel. Virgil Abloh. They were visionaries who have gone down in history books as innovators, and disruptors in their heyday.
Without creativity and the yearning to innovate, your business could become stagnant; another statistic.
Steve Jobs once said, “Innovation distinguishes between a leader and a follower.” Innovating and moving with the changing landscape is important to achieving company success. About 78% of CEOs claimed during a PwC survey that it’s the deciding factor in growing a business.
Task Due suggests a flash of innovation can come in different forms. Expanding your products and services can open new revenue streams and reduce operating costs.
#4. Hiring the Wrong People
Imagine hiring a farmer to update your company’s software. It might not be as obvious when you’re going through the HR process, but hiring the wrong people to do the job can cost your business thousands.
Insignis Talent says besides the financial repercussions, staff morale can take a dip. Let’s not forget about the negative online reviews. Sometimes, a bad hire can take their grievances to job posting boards or websites carrying anonymous company reviews from former employees.
A high staff turnover could be a bad reflection on your company. Clients get jittery if they notice you’re not holding onto talent or getting rid of bad apples. Reputation and credibility are everything in the startup sector. Be sure to keep the slate clean.
#5. Ignoring Client Feedback
Market research and customer feedback go hand in hand. That’s why it’s important to take all feedback, good or bad, on board.
Failing to listen and adapt to your customer’s needs is a surefire way to lose business and derail your brand credibility. Feedback and online product reviews provide valuable data that you can use to improve your customer’s experience with your product or service.
Taking your client’s feedback to heart tells them you want to improve their lives. It’s one of the fastest ways to build brand loyalty.
By steering clear of these mistakes, your startup has every chance for success. Remember, it’s the finer details that make or break a business. Hire the right people for the job and devise a clear business plan, and you’ll be on the road to increased growth and revenue.
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