It’s not easy to run a start-up. It’s not easy to start a business from nothing, build it up and take it to market for the world to criticise and knock down.
But there are things that many start-up founders do that are not helping them gain traction and success. Some of the things they do are just plain dumb. Here are my top picks to avoid!
Make investors sign an NDA
I’ve heard this frustration from absolutely every investor I’ve ever met, pitched to or received money from. So you trust an investor enough to ask for money but not enough to believe that they won’t steal your amazing and never-before-seen idea?
The cold truth: NDAs are extremely difficult (if not impossible) to defend legally and they destroy the trust of the person you’re meeting with. Success is in the execution, not the idea.
Arrive late for meetings
The immediate message you send out when you arrive late for a meeting with a prospective client, investor or mentor is that your time is more important than theirs. It will definitely harm your chances of doing business with them.
The cold truth: Don’t be late for a meeting. You think you’re being the busy founder who has a lot on his plate; they think you can’t organise your time or priorities properly.
Endlessly building instead of selling
Building a great product is an important base to start a business from. However, at some point, when you have a great product, you need to start selling it as a core focus of your business.
The cold truth: Many start-ups build their products into the ground. A new feature isn’t necessarily going to create more sales and generate more revenue. Making sales calls will.
Ignoring cash flow
The dumbest thing that a start-up can do is ignore or forget that cash flow is a problem for absolutely every business. Cash flow will be one of the biggest issues that any business will face. Without cash in your bank account you can’t pay the bills.
The cold truth: Even if that one big invoice is being paid in a couple of months, without the money in the bank today, you can’t pay your staff or your rent. Manage your cash flow daily.
Related: Selling Mistakes You Need to Avoid
Forgetting about the data
Most good businesses have a lot of data about their customers, products and business. Ignore that data at your peril. Data makes your product better, crisper, more focused and helps you make gut decisions with confidence.
The cold truth: Relying on your gut alone will more often than not lead you into a dark place. Always back up your business rules and decisions with the available data. If the data doesn’t support your decision, make different decisions.
Building a solution that is searching for a problem is a sure-fire way to blow a lot of time and money on something that you can’t sell.
The cold truth: Start-ups often forget to do the simple research that asks if there is a need for the product or service they’re selling. A simple Google search will show up competitors or if there’s a gap in the market. Do the basics and get them right.
Thinking any growth is cool
It’s great when a business starts gaining traction. When revenue starts to come in and the work load piles up you start to think it’s time to hire staff, move into offices, get a parking bay and other ‘grown up’ things. Growth is cool, but remind yourself what kind of growth is cool.
The cold truth: Growing your profit is cool. Growing your overheads is not. With every new staff member comes complications like HR issues, equipment purchases, salaries, the inevitable office move. It’s not a bad thing to work as hard as you can for as long as you can, growing your profit with a lean and mean team. You don’t need to be a physically big company to be financially strong.