In this modern life, many people worship the idea of startup. They want to take control of their lives so much that they will come up with ideas to make their dreams come true. However startup is never an easy game, in fact, it defeats 90% of entrepreneurs who dare to challenge it. Even for the biggest corporation, the successful rate of a startup is just only 10%. But the matter isn’t that your startup failed, but why you failed. If you are a first time entrepreneur who had failed or just simply don’t want to fail a startup anymore, read Top 10 mistakes first time entrepreneurs make which cause startups fail and find out the solution.
1, Mistake of the period time to make profit
This is really difficult to talk about making profit. Because most of the first time entrepreneurs don’t have any experience, they will make mistake of calculating the period time to make profit. Most of them think a first time startup will bring the profit back in 1 year. However there are two possible case. The first is you make profit in one year, and decrease in the next year. The second is you miscalculate completely the period time. It may take you 2 years instead of one and you just abandoned it. Well, practically a startup will need about 3 years to make profit.
2, Mistake of the market size
First time entrepreneurs always make mistake of the market size, or you can know that they are actually underestimate it. Some first time entrepreneurs overestimate their market share ten times than the fact. They must think about the sales and marketing cost to reach this level of market size.
3, Mistake of fund and cash flow
This is the serious problem. We have reading in the last topic Top reasons why startups fail and know that 82% of startups are self-funded. So it’s really difficult to get funded. However, maybe they don’t get funded at the right time, they should at least wait for possibly 1 year to get funded.
The problem of cash flow is also serious because no company can run without any cash. And together with the time to get funded, manage your company cash flow is the most difficult but compulsory task.
4, Mistake of the customer’s needs
Another popular mistake that first time entrepreneurs always make is identify the customer’s needs. When you receive a lot of good review from the audience, you think they will choose your products. The answer is, quite occasional. For example you launched a good smartphone to the market, and receive lots of supportive comments. But the fact that the market of smartphone are devouring by the master of Apple and Samsung, so how you can defeat them. That’s the reason why you need to find your own niche.
5, Mistake of pricing policy
Well, since you are first time entrepreneurs, it is possibly you don’t know about setting your price. And without setting good price, you may either don’t have any customers or you will get deficit. Either way you fail.
6, Mistake of competition
This is quite similar to the mistake of the customer’s needs. However, it is more clearly because every field of market has competition. If you can start a new idea, people will easily copy your products and you can’t stop it.
7, Mistake of the self-service
Most startup underestimate the power of self-service system, which cause them lose most of their customers. Especially in E-commerce, self-service is really important. Read New century of online E-commerce self-service and find the solution of E-commerce self-service now, which is the Magento 2 FAQ extension.
8, Mistake of growing and expanding the business
This mistake is really dangerous. Your startup are developing good and you decide to expand your business. However, you must think really carefully before making this step. Because it cost lots of budget that you would never imagine before. Don’t make your end so quickly, you can wait probably 2 – 3 years to become stronger then you can expand your business.
9, Mistake of marketing campaign
This mistake is always from the lack of the experience of the marketing team. Though it is not as serious as other mistakes, but it will cost you a lot if you can’t find the solution.
10, Mistake of managing
As Nathan Furr, an entrepreneurship professor of INSEAD, once said that the most dangerous reason causing startups fail is the out of management issue. With a small team of startup, if you have the internal problems, you will never run a straight way to success.
So now you have basic to avoid the first time entrepreneurs’ mistakes, will you solve it and become more successful or you just stop and die.