No matter whose stats you look at, the numbers on startup longevity are grim. The first few years are the hardest, with about 45% of all businesses failing inside five years, and at least one in five failing in the first 12 months alone.
Businesses fail for many reasons. Usually, it’s because they do not have enough capital, clients, or planning.
So as you look to survive your first 12 months in business (and hopefully many more years to come), we’re going to walk you thru some common mistakes that might put your online business among the many who fail to find enough income to cover their bills.
It goes without saying that the first 12 months in any business will consist of a few mistakes and a steep learning curve. The goal ought to be to respond quickly to the pitfalls that arise along the way, but also to avoid easy mistakes by planning ahead.
The 5 Most Common Mistakes Entrepreneurs Make in Their First Year of Business and How to Avoid Them:
- Assuming they will do all of it themselves
The typical entrepreneur starts with limited resources and growth goals to achieve in a given 12 months. This often leads to a desire to cut costs by doing every thing themselves.
Unfortunately, there are just too few hours in the day, and entrepreneurs find yourself stretching themselves too thinly on the core parts of their business. An absence of focus and expertise in key areas of the business will make it difficult to achieve any significant growth in the first 12 months.
How to avoid overload: Identify the key areas of your online business you can’t devote enough time to or don’t have enough knowledge in. Hire the right skills for those areas and all the time try to hire individuals who have more knowledge in those areas than you do. Although you’ll incur higher costs, you’ll drive more growth.
- Thinking they will work longer hours than everyone else
A competitive edge in business is something every founder seeks. One easy way to achieve it is to work longer hours. Entrepreneurs are naturally results-oriented, which suggests getting as much done in a day as possible.
Working 14 hours a day does have an impact, but only for a short time period.
Burning the candle at each ends leads to a lot of negatives. Being drained means you are not at your best; and being in lower than optimal shape means lower than optimal performance.
You can turn into much more productive when you are rested, relaxed and blissful. Fourteen-hour days are the enemy of all of this stuff.
How to avoid inefficiency: First, working smarter is higher than working long hours. Short, concise planning sessions at the starting of the week will allow you and your team to focus more on the most vital tasks that need to be done. Learn more about agile planning.
Reduce time killers like long meetings by scheduling them, prioritizing who needs to be involved, and what consequence you would like to achieve. Also, make sure that crucial information is shared before the meeting so that participants can read it in advance, making the meeting faster. Can you send an email summary to the remainder of the team after the meeting?
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- Maintaining cold contacts
Startups do not have the authority of a larger company and often have fewer industry contacts. Often the founderThey will consistently send LinkedIn messages to contacts they haven’t talked to before, or launch email campaigns that are clearly attempts at cold contact.
Not only is this a waste of time, but the people you would like to talk to are unlikely to fall for such tactics.
How to avoid indifference: There is no perfect formula for skyrocketing response rates. But start investing time into your personal networks and existing business relationships. Once you’ve identified the people you would like to message, find a common connection you have with them in your industry; possibly someone you met at an event or through a former coworker.
These warm relationships will allow you to borrow authority from people you already have contact with, making your networking efforts more credible and likely simpler.
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- Delivering your success
A standard startup problem (which is a nice problem) is overdoing it. When you’re on the market gunning to make a sale or drive traffic, it’s easy to forget to make sure you haven’t gone too far. Too often, owners want to increase revenue without considering the challenges that exponential growth brings.
Imagine you have five meetings and you get orders from all five. You need to make sure you’ll be able to fulfill all five. Do you have enough inventory? If not, are you able to reorder and produce quickly? Can you get them to the buyer on time, if you’ll be able to?
How to avoid taking on greater than you’ll be able to handle: Of course, you won’t turn down a sale, so that’s not the way you’re going to solve this problem. Look at your process from start to finish and understand the pain points. What will cause you to have a problem if you oversell? Make sure your online business has the flexibility and capability to deliver quickly.
Secondly, all the time know exactly what is happening with your product. Investing in software that may track the availability of products in your warehouse, for example, can be necessary if you were an e-commerce company.
- Not having fun with the small victories
The startup world is a fast-paced environment, and stopping for a moment to congratulate yourself and pat yourself on the back appears like a luxury. The difficult reality of keeping a young company growing puts pressure on entrepreneurs to skip key steps in their business.
However, a common misconception is that basking in success can lead to complacency. Quite the opposite. Enjoying the journey as much as the destination is not going to only make your job easier, but it is going to also create a positive culture inside your organization.
How to enjoy this process: Schedule time for team socializing. Celebrate award wins and major product launches with a company lunch. Take an afternoon out of every month to plan an activity that is in no way related to your online business. When something goes well, rejoice it!