Startups are driven by entrepreneurs with vision who believe their ideas could catapult the business in its chosen market. While that’s a wonderful sentiment, unfortunately, 90% of them fail.
So why do so many startups go under before they hit that sweet spot and take off? Many things can kill a business – poor planning, poor work ethic, and a chaotic process. Undoubtedly, many startups are characterized by chaotic energy and rapid growth during the initial stages. But there are still things that founders often overlook that can be like a death knell for their new business.
In this article, let’s walk through the 8 major things that startups overlook, which become difficult or impossible to fix.
1. Market Research
Getting a new business venture up off the ground is a whirlwind time, while it’s easy to get swept up in things. And forget about doing due diligence. The startups that succeed are the ones that put in the work, and that means research. Specifically, market research.
For any startup to succeed, they need to have detailed reports on their customers, competitors, market challenges, and opportunities. If local startups plan to expand in the future, they need to research international markets as well.
2. Thinking About What Comes Next
Part of being a visionary leader means planning and building strategies for future growth and opportunities. A startup can only get so far on its initial growth spurt, and the business can only ride that novelty wave for so long.
This is especially true for startups that create a breakthrough product or service. Even if there aren’t any competitors right now, there will be down the line. And they have the advantage of a primed market so they’ll likely have a better sense of what to do next.
3. Hiring Competent Professionals
Sometimes startup founders and employees will try to stretch themselves further and take on jobs that they don’t normally do. The idea is that this saves resources and time. But sometimes, when people try to take on projects that they aren’t knowledgeable or skilled in, it can end up costing the business more. Take that initial hit to get experienced professionals for the important jobs – it will pay off in the long run.
4. Network Security
With so many things going on, some of them – like digital security – get pushed aside or forgotten. Yet, it’s one of the most critical aspects of doing business today. Without proper security, a fledgling business could lose its assets, like intellectual property, startup funds, and customer data.
Network security is a big part of that. One crucial step is making use of a VPN to encrypt network traffic. Generally, people know of VPNs as tools that hide one’s IP address. So you may ask why hiding my IP can help the business? Startups are flexible, and some make use of remote employees, but that results in a security issue. Besides masking IP addresses, business VPN solutions also enable only connected employees to access specific online platforms, like GitLab. Hence, they improve security.
5. Proper Internal Communication
Constant internal communication is crucial, even when the business isn’t at that stage of uncontrolled growth anymore. Miscommunication is costly and can prevent management from identifying discontent or other problems among the team. Daily catch-ups might not always be possible, but even one weekly meeting to keep communication clear can make a big impact.
6. Establishing a Solid Company Culture
Just a few realize how important it is to get a great company culture cemented right from the start. It’s easy to have a breezy attitude and encourage people to focus on company goals. But founders don’t want to end up with a bunch of people who dislike each other or don’t know how to collaborate properly. It distracts from the mission and impedes long-term success.
7. Getting Suitable Insurance
Insurance is one of those things everyone hates having to pay for, but feel relieved about having. Don’t skimp on the business insurance, even if it doesn’t seem worth it. When things go wrong, they can get ugly fast, which can be a big blow for a startup.
Don’t close up shop due to some unforeseen disaster that an insurance provider doesn’t cover. Few new businesses can afford to fix any major problems out of pocket.
8. Having a Backup Plan
A lot of startups are always on the verge of running out of funds, and any mistake or problem could set them back. Usually, things don’t happen like clockwork – something takes longer or costs more than expected, or a new development arises. Having a backup plan in place is always a good idea.
Many startups fold within the first 3 years because they overlook specific crucial steps. There’s the chance of failure with every business venture, but startups must do their due diligence and plan. These 8 things that startups tend to overlook is an excellent place to start.