Starting off the beaten track with a new idea or an upgrade is never easy. Asia is the currently the new breeding ground for breakthrough ideas and out of the box innovations assisted by the startup boom.
While many would love to build upon their venture dream and Florida, only a few actually make it big enough to compete and outwit existing dominant players. It is a known fact that 9 out of 10 start ups just cannot get past the planning stage and out of the ones that do, only a handful make it big.
So where does the secret lie to building an empire out of a dream idea? A few pointers on what mistakes one should avoid to ensure your dream venture does not self-destruct.
Going Too Big Too Soon
One of the most common blunders made in the startup community is increasing scale of operations too soon and by large volumes. This happens when a decision is made to up one of the production inputs (customer pool, product, staff, funding) without proportionally increasing the rest.
For instance, increasing staff members and hiring too many people in the team even before the idea takes off. It could also mean using up a large percentage of the funds in the product even before considering its demand and viability in the market.
Upping the scales should ideally be done over time once the product has created base in the market.
Lack Of A Well-Planned Business Model
Pre planning a business model is key to a startup success story. The aim and purpose of the venture along with strategies implemented to achieve needs to be chalked out conceptually. The model must ensure that it covers good revenue margins while at the same time ensuring 100% customer satisfaction.
The core team must build a clear revenue model based on present and future customer pool and income streams.
The model must consider what the company should focus on “next” once the initial profits start coming in.
An entrepreneur no matter how great at founding and building the idea cannot always look into all matters. Hiring the right team to handle different areas of expertise becomes mandatory.
When entrepreneurs lose confidence in their team, that’s when the trouble starts. Going solo to make it on their own becomes the next best option. Investors and VCs always prefer investing their money in a startup lead by a team of individuals as opposed to a venture lead singlehandedly.
Overlooking Dominant Players
It’s great to be positive and optimistic about your unique idea but not to the extent that you completely neglect researching your competitors in the market.
The startup idea and product launch needs to be backed by physical data to avoid surprise losses and shortcomings. Proper research on the current market situation will facilitate better pricing and acquisition of the required target customer pool.
Misuse Of Finances
Financial resources need to be handled with utmost care when it comes to building a startup. A common blunder made by entrepreneurs in the initial phase of their business is to overspend too soon.
This money may get spent unjustly on hiring an unnecessarily large team, or on capital that will only be used much later in the venture. Funds need to be budgeted to meet unforeseen expenses which are inevitable when the business just begins its functioning. Insufficient funds set aside for costly changes will lead to definite downfall.
Missing Plan B
In an ideal economy everything will go exactly according to the plan on paper. However we all know too well that hardly anything goes the way we hope or visualize. For this reason, every startup should inherently be inclined to take a change of plans by their stride.
We have seen the best in the business resort to a plan B in their production to survive in the market and later thrive in it. The best example is Twitter, which started off with podcasting under the brand Odeo. In came Apple, and Odeo had to change ways to turn into the social media juggernaut that we know today.
The place of set up for a business needs to be given immense thought. The right location of an enterprise ensures cost efficiency and better reach of the customer pool being targeted. The right location will also attract funding sources as they would prefer to invest in ventures closer to their reach.
Hiring The Wrong People
This almost always leads to a business shutdown if not taken into consideration at the very early stages of setting up the venture.
People hired need to be technically and emotionally a sound fit for the company. Education and work experience needs to be looked into with validation, and personal relationships need to be forgone. The best of friends may not always make the best business partners. Wrong people working for your venture will only be a financial and mental burden in the near future
The success of a new venture all depends on laying the intended product on front of the right people at the right time. A product or idea is only as successful as its need in the market.
Launch too early just to start making revenue and it puts the whole venture into risk mode as the customer pool may simply not be ready for it. Launch too late and beware the competition, you risk someone else taking away your market share
Ignoring The Gut Feeling
Every entrepreneur has an inherent gut feel about the business being built up. If your instinct tells you something, just embrace it and follow it as you go along your startup journey.
Following that hunch will be a sure reward if backed up with valid facts and data which have been extensively researched. Some of the best business decisions have been made based on a mere hunch!
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