Top Ten Pitfalls That Could Sink Your Startup
Although no one gets involved in a startup because they plan to fail, the harsh reality is that it does happen. While it's impossible to foresee every situation that could sink a new business venture, there are some common pitfalls to avoid.
1. Lack of business plan - A good business plan is critical to the success of any new company. It helps identify your target market, judge what kinds of resources you'll need in the short- and long-term, and also forces you to look critically at decisions that will impact the health of your company. If you're not sure how to go about crafting a business plan, there are plenty of online resources to help you figure it out.
2. Lack of budget - Once you've outlined a general plan of attack for how to get your new business up and running, put together a preliminary budget that shows an overview of the cash you have and what you plan to spend. You'll have the opportunity to fine-tune your budget as your formal business comes together.
3. No clear priorities or delegation - Nothing can torpedo a startup faster than a lack of priorities. Make sure to keep communication lines open so everyone involved in your new business knows exactly what to expect, and what's expected of them. This will also help avoid that gut-wrenching "I thought you were doing that!" conversation right before an important meeting.
4. All planning, no action - Conversely, don't get bogged down in so much planning that nothing ever gets done. It's great to have meetings and brainstorming sessions, but make sure all the terrific ideas they generate result in action.
5. No mentor to guide you - Managing the intricacies of a startup is difficult enough without trying to go it alone. Find a mentor with startup experience who can guide you away from common mistakes and help you network with people who can make your business a success.
6. Don't oversell your business - Although starting a new business is exhilarating, avoid overselling it before you know you can deliver on promises you make. While telling others about your company, it's tempting get caught up in the enthusiasm, but be sure not to set up a potential customer for a letdown when they find out you can't provide a particular product or service after all.
7. Don't undersell your business - While you don't want to oversell your startup, you certainly don't want to undersell it either. Don't be shy about telling others about your new company and why it's new and different. Let people know they should believe in your business because you believe in it, too.
8. Don't reinvent the wheel - Some aspects of running a business are tried and true, so there's no reason to spend a lot of time and money trying to invent new ways of doing things. Innovation is certainly the key to success, but spend game-changing research and development time on your product or service, not designing new word processing software (unless, of course, that's what your business is about).
9. Lack of balance leads to burnout - "I'll sleep when I'm dead" is a cute catchphrase, but burning the candle at both ends to get your startup off the ground is never a good idea. Try to avoid 80-hour work weeks so you're firing on all cylinders when you meet with potential clients, customers, or investors. Make sure you also preserve your relationships with your family and let them support you when you need it.
10. Failure to cut your losses or change direction - Even the best business plan or budget can't predict every challenge a startup will face so it's important to know when to change your approach or eliminate issues that are holding you back. Cutting back on part of a product or service or taking steps to correct a cash flow problem isn't a sign of failure, it's a sign of a good businessperson who knows when to take corrective action.
Source: http://blogs.sun.com/sun4startups/entry/top_ten_pitfalls_that_could
1 comments:
This is new. Thumbs up for top ten pitfalls. We need to make sure we won't fall into any of them.
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