Published on July 18th, 2012 | by Senior Editor0
5 Basic Mistakes That Can Crush Start-ups
The start-up phase is the more fragile phase in your business development. Here are 5 mistakes to avoid.
Make sure that there is demand for your business.
If you start with few resources you have little room for trial and error. Your start-up company needs to offers a product or service that is clearly differentiated from their competitors in order to generate unique demand for it. When you start your business you need to be confident that your product or service is aligned to a demand in the marketplace and that your target consumer population is large enough to generate the sales that you desire.
Often start-up businesses are inherently small; they are initially run from a small kitchen or a garage from home or a small office flat. Entrepreneurs are faced with the question: “Do I tell my customers I am still a small business, or do I convey that I am an experienced company?” While it is true that the way your customers perceive your venture can influence your sales, the key however lies not in where you do business but how professional you are.
Professional business cards and stationery are essential for that important first impression. If you operate a web site, make sure it runs without errors, the grammar is correct and the pictures clear and not blurry or stretched. Try to answer every phone call and answer as professionally as possible. Be careful that background noises such as dogs barking or kids running around do not contrast the professional image you want to convey.
Customers are gold to your business.
You cannot afford to be dismissive or deaf to consumer’s queries or complaints. In the start-up phase you often do not have the resources to aggressively seek out new customers, initially start-up derive their core business from referrals and repeat business. Take care of the customers you already have by offering them timely and quality service, helping them make informed choices and make their lives easier instead of worrying about the rest of the market you have not yet secured.
Do not mix business with pleasure.
Running a thrifty business, especially in the start-up phase, should come naturally if one is serious about making the business sustainable. Re-consider if it is feasible to pay yourself an income, if the start-up organization can run more streamline without this expenditure. A good guide when paying yourself or your subordinates a salary is to remember that paying market related salaries may not fit your initial short-term cash flow plans nor your long-term sustainability planes. Rather consider paying only salaries that are affordable to your company.
Find your passion market-fit.
Unless your product or service maintains a niche position in the market or is so innovative that it creates a new market, keep in mind that every single simple thing that can be done is being done, or has been done. Creating a product or service that is very market precise e.g. plastic covers that can fit only one type of mobile phone, can be very risky. Consider building your company around what you’re passionate about. You will work harder because you will be doing something that you find intrinsically valuable and you will be able to persevere the business challenges that accompany the start-up phase of your business.
Source: Louis Nel for BusinessTrade.org