Give your start-up the best chance it has by following these guidelines. Make sure you’ve avoided all these 18 common mistakes before launching your start-up or you could set your business up for failure before you’ve even gotten off the ground.
Get through all the work yourself is tough and you need someone to brainstorm with. Partners can talk you out of stupid decisions and keep your spirits up. Start-ups have very low, lows. Multiple founders will bind you all together and keep your enthusiasm, determination and motivation levels high
Specific cities have prosperous start-ups because they have:
- Higher standards
- The type of people you want working for you, want to live there.
- Supporting industries
- Concentrated industry experts
These all contribute to the success of start-ups and when they’re missing the failing of start-ups.
Don’t choose a small, obscure niche market to avoid having competition. Every good idea you come up with will most likely already have competition or could potentially have competition. You can only avoid competition by having bad ideas. Smaller ideas may seem safer but they won’t get you the success you’re looking for.
Majority of successful start-ups haven’t imitated someone else’s idea. Their ideas came from specific, unsolved problems they either identified or had personal experience with.
Pivoting May Be a Necessity
You’re going to receive unexpected feedback. Don’t give up and don’t ignore it. Use the feedback to inspire you to change your business model which could help you avoid failure. Many successful businesses had to change course along the way.
6. Hiring Bad Programmers
Bad programmers will slow down your progress. Check that your programmer can do what he says he can do. Hiring or partnering with a good programmer could help you hire experienced programmers.
Choosing the Wrong Marketing Platform
A platform that looks respectable and fine from the outside could destroy your start-up. Give your programmer the choice. A useful trick: See which one they’re using at a top computer science department for their research projects.
8. Slow to Launch
This only works if it’s a strategic and stealthy launch. Don’t spend ages in development. Rather get your most valuable product developed and release it. Then you can see how your potential customers will react. Don’t overdevelop, hundreds of features won’t keep your start-up afloat.
Launching too Early
You can ruin your reputation by launching too early. If people try out your product and it’s not good they won’t try it again. Your newly launched product doesn’t have to be perfect it just has to do something.
10. No Specific User in Mind
Test what you have with your target market. Don’t rely on your intuition. Talk your target market into using your products, if you can’t you’re on the wrong track.
Raising too Little Money
Getting investors to invest in your business is a good strategic bet. You need to take enough to advance you to the next step, like a working prototype or significant growth. Set your expenditure low and your first goal, simple, this will give you maximum flexibility.
Spending too Much
Spend your start-up funds wisely. Invest in exceptional people and quality products. This will work in your favour long-term. Be strategic and balanced with your spending.
Raising too Much Money
Large investments have drawbacks:
- Time to negotiate, companies are cautious when investing
- It requires you to employ more people and rent office space – once here you can’t easily change course
- Managing your employees and the office politics which follows
- Your employees aren’t founders, they won’t be as committed.
Don’t bargain hunt between investors. An offer from a reputable firm, at a realistic valuation with no abnormally tedious terms, is a good bet.
Poor Investor Management
Listen to your investors useful insights. Don’t allow them to run your company. An example of investors making trouble with successful companies can be Apple, whose board nearly fired Steve Jobs in the early days. Even Google had issues with investors when they started out.
15. Sacrificing Users for (Supposed) Profit
Develop your product and your business model with a customer’s come-first approach. Focus on a sustainable business and not only on making money. Create this by having happy, devoted and long-term customers.
Don’t Want to Get Your Hands Dirty
Spend half your time developing your product and the other half talking to executives and arranging deals. Companies won’t buy a product if there is no tangible proof that it will be successful. Grow a user base to make your product more attractive to acquirers.
17. Fights between Founders
Majority of the disputes are personality clashes. Don’t start a company with someone you dislike or because you didn’t want to leave someone out. The people involved are the most important ingredients, don’t compromise here.
A Half-Hearted Effort
The biggest mistake you can make is not trying hard enough. The common type of failure is not the one that makes a spectacular flameout, but the one we never even heard of that never really went anywhere and was gradually abandoned.
Mistakes will be an unavoidable part of the start-up process. That doesn’t mean you should repeat everyone else’s mistakes.
This infographic was visualised by Mark Vital for fundersandfounders.com.
Which eCommerce Platform Should You Build Your Store On?
This is an important decision to make and with so many options out there it can become a bit overwhelming and confusing to decide which platform is the best option for you. So which platforms are best suited for a South African eCommerce entrepreneur?
Having owned and run websites using XCart, Magento, Shopify and WordPress, I’ve made enough mistakes and learnt enough lessons along the way to be able to help guide you to make the right decision about which platform is right for you…
When looking for options you’ll come across platforms like Prestashop, WordPress, WIX, Shopify, Squarespace, OpenCart, Magento, Shopstar, OneCart, ShopOn, LiquidBox, BigCommerce and endless more. All of which are trying to convince you that their platform is the best for you to use.
Reading international blogger reviews is helpful but they don’t account for how these website platforms perform in South Africa. They don’t review what the support is like in SA and which local software services are compatible. You see, these points are often neglected until you need them further down the line and only then find out how important it is that the platform you’re running your store on is made to work in SA.
Having worked with all the major website platforms I understand the importance of website support and how the site integrates with the local services which will make your life easier and your website better. Services like this include integrations into Rand (ZAR) based payment gateways, integrations into local courier services, API connections into marketplaces like Takealot and Bid Or Buy, and API connections into price comparison sites too.
The final factor to consider is the reputability of the website platform itself. There are many new and upcoming website platforms which I would love to support but when it comes to choosing a platform on which I’ll be building my business I need to know that I am going to be selecting a world-leading service provider.
So with this in mind I can help to narrow down your options to two platforms being WordPress with WooCommerce and Shopify. Which of these two is right for you will depend on how much you value your time.
Shopify will cost you $29 per month but the ease-of-use is such that even a novice can get a site live within a week. Operating WooCommerce on WordPress is complex for beginners and it will take you much longer to figure it all out before you can take your site live but the plus side is that it is free to use.
So ultimately you need to consider which of these two is right for you and your business but the most important thing is that you don’t spend any more time researching, take action and get started sooner rather than later so you can start to grow your online empire.
6 Ways Starting A Business Is Like Raising A Child
Here are six ways that embarking on your own entrepreneurship journey is like raising a child.
While you may think work and parenting are worlds apart, when it comes to starting a business versus having a baby, the two have more in common than you think.
After all, both involve bringing something new into the world, preparing for the unexpected, and riding the storm when things don’t go as planned. Here are six ways that embarking on your own entrepreneurship journey is like raising a child:
1. It involves new expenses
From nappies and school fees to food and clothing, there are a whole lot of new expenses involved when it comes to kids. In the same way, starting a business also involves various costs – whether it’s paying accounting fees, setting up your website, buying stock or employing people. In both instances, having a good financial plan in place can go a long way to help you manage these expenses.
2. It’s an emotional rollercoaster
Parenting invariably means you’ll experience every emotion under the sun, from unmatched joy when they’re born, to frustration at toddler tantrums, to wonder at seeing their little personalities develop. The same goes for a new business: Expect a range of emotions, from the highs of getting your first customer, to the satisfaction of making a profit, to anxiety if the market doesn’t respond to your product as you envisioned.
3. Expect the unexpected
Few things are as unpredictable as babies: One minute they’re gurgling contentedly, the next minute they’re crying for reasons you may or may not know. Just like babies, businesses can be highly unpredictable too. Product prototypes can fail and cause delays, employees get sick, an unforeseen tax bill could arrive on your desk – you’ll need to get comfortable with expecting the unexpected. And, if you run your business full time, you’ll need to bid farewell to your predictable monthly paycheque too (at least in the beginning).
4. It requires stamina
Late night feeds, helping your child with homework, washing, cooking, cleaning, answering all their burning questions – there’s no parenting “off” switch. In the same way, being an entrepreneur means it’s hard to stop thinking about your business at the end of the day as you would with a regular 9 to 5. This constant call for attention means it’s crucial to schedule in some downtime for yourself so that you get time to decompress and refresh.
5. You’ll need safeguards in place
While their immune systems are immature, young children get sick, which typically involves trips to the doctor, medication and possibly even the odd hospital stay. Having a good medical aid means you’ll be financially prepared for these intermittent expenses. And, just as you should ensure your child has the right medical cover, your business and your employees should also be covered properly. Fedhealth is one example of a medical aid that specialises in providing medical cover for SMMEs.
6. Love will get you through
As hard as parenting can be, the enduring love most parents have for their children means they keep caring for them day after day, no matter how exhausting it is. Similarly, if you love the industry your business is in and the work you do, you’ll have the fortitude to keep at it over the long term.
Both parenting and starting a business are hard work, but they’re hugely rewarding too. With both of them, it’s true that what you put in, you get out. Seeing your child grow into a well-adjusted, caring adult can be as satisfying as watching your business mature into a something that’s profitable and self-sustaining. Upon reaching these milestones, most people will agree that the journey to get there is definitely worthwhile.
Start-ups Need More Than Money To Succeed – They Need Smart Money
Start-ups need investors who bring not only cash to the table, but also their networks and business acumen.
Ask any start-up what the single most important element to success is and – more often than not – the answer will be money. Financing always ranks as a high priority for the small fish trying to make it happen in the big pond of business – but often discussed with less fanfare is where this cash comes from and what will come with it. These are actually the most important details to a start-up.
That is not to say that money is not important. In fact, the second most common reason for start-up failure is lack of funding, according to CB Insights. Although, perhaps ironically enough, the top reason for start-up failure is lack of market need – a problem which could have been identified and avoided by investors who bring money with direction and money with experience.
Start-ups don’t just need money, they need smart money.
Start-ups need investors who bring not only cash to the table, but also their networks and business acumen. Essentially, they bring experience and direction to outfits that are usually inexperienced or directionless. So, let’s talk smart money and the start-up.
What is smart money?
“Smart money” refers to investors who are simply more intuitive and aware of market movements and business health. The Financial Times describes “smart money” as “sophisticated investors who tend to pick the right moment to buy or sell assets because they can identify trends and opportunities before others do.” These investors calculate based on history and profit and invest accordingly. Where they go, other investors follow.
These business heavyweights are invaluable to a startup because they put more than simply their money where their mouth is; they also invest their expertise. A start-up could have all the money in the world but it will fail more without the proper business direction and market placement.
Smart money works best for start-ups when nascent businesses pair with investors who provide a holistic approach to business. They can help in hiring the best talent, attracting interest from the most relevant stakeholders, securing a continuous presence in the press, avoiding pitfalls and, ultimately, fulfilling ambitions.
There are more than a few ways that money can be termed as smart. Perhaps the cash infusion also comes with experts in thought leadership and strategy, or executional capacity, or the ability to increase sales and raise funds. Whatever the method, smart money brings something more to the table than dollars. This becomes abundantly clear when conducting post-mortems of the startups which have failed.
Why do start-ups fail?
Start-ups fail all the time – and it is important to understand why. As mentioned above, the top reason start-ups fail is simply the lack of market need. Tackling problems that are interesting to solve rather than those that serve a market need is the most common issue start-ups cite for their downfall. The next most common reason for start-up failure, as likely predicted, is money. Smart or not, money does need to flow into any start-up to make it possible. Meanwhile, the third most common reason for startup collapse was team composition. More to the point: Start-ups need to comprise a diverse team with different skill sets.
These top three reasons for start-up failure could be solved with the right management approach from the top down. Each of these reasons can be addressed with smart money. The right business and management structure will allow the right hires to be made and course to be charted. Smart investors can identify the right people for your team and help you to hire staff who will take the business to the next level.
While start-ups think money is the key, it is not the end-all and be-all for their potential success. They need skills and networks. Business and innovation expert Rosemarie Truman explained this misunderstanding best: “A common mistake entrepreneurs make in their struggle to find funding is focusing too much on getting the money under specific terms and not paying enough attention to who is providing the funds.”
Show me the (smart) money
Savvy entrepreneurs recognise their businesses need more than cash to be successful – especially those at the top. Alibaba chief executive officer Jack Ma, who ranks as one of the richest people in the world, described the need for smart hires and smart staff as thus: “At first, I knew nothing about technology. I knew nothing about management. But, the thing is, you don’t have to know a lot of things. You have to find the people who are smarter than you are.”
Smart business owners want to work with investors who provide not just money but also their expertise, time and access to networks – and this is especially important for businesses looking to scale. The proof is in the research: Take for example a paper by Morten Sorensen, professor of finance at Copenhagen Business School, about venture capital and its impact on an overall business. Sorensen found that companies funded by more experienced venture capital funds were more likely to go public, and also that more experienced venture capital funds invest in better companies, leading to better long-term business health.
So, the question then becomes: Where does one access smart money? The answer will depend on whom is asked, but startups that have survived and later grown into viable businesses are a good place to start. The founders of collaborative blogging platform Niume, Daniel Gennaoui and Francesco Facca, have this advice for start-ups who are on the hunt for smart money:
“First, you need a strong founding team with complementary skills that can actually deliver on their promises. Second, you need a working minimum viable product (MVP), showing that there is traction and interest for the product and people willing to use and pay for it,” the founders said. “The actual amount they invest is far less important than the value they bring to your company.”
It is also worth noting that crowdfunding can be considered a form of smart money, as it brings an ecosystem of partners who will help to scale and countless brand ambassadors who have invested their hard-earned cash.
It’s simply more than capital
Gaining start-up finance is not only venture capital or crowdfunding – it should also provide an ecosystem of business management and be viewed as such. It’s simply wrong to think funding is only funding. Start-ups can have all the money in the world but will fail more often than not without the proper business direction and market placement. Those who want to make a lasting impression in their given field need the guidance and support smart money brings.
This article was originally posted here on Entrepreneur.com.
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