The modern world affords endless opportunities for people who have enough grit and determination to run their own business. Starting a company is one thing, but maintaining momentum is another matter entirely. As a matter of fact, statistics show that 70% of startups fail to celebrate their 10th birthday.
While many get intimidated by startup failure rates, giving up your dream should not be an option. For first-time founders, it’s a matter of striking the perfect balance between hard work and knowledge.
Know the Do’s and Don’ts of Raising Funds
One of the most cited reasons for business failure is inadequate funding. Ultimately, the bloodline of any business is money. You need capital to make your business run and stay afloat. It’s no wonder so many first-time founders ponder the best way to fund their startups.
What to do:
- Build relationships. Expanding your network and connecting with potential investors is crucial. One of the best ways to engage investors is by sending them updates via email newsletters.
- Inject passion into your proposals and pitches. Investors want to hear your confidence in your ideas, so keeping the passion alive when you do a pitch can make a huge difference.
What you should not do:
- Burn bridges. Everybody knows everybody in the business community. Even if you are experiencing difficult relationships with other entrepreneurs, it’s always wise to maintain professionalism when dealing with them. The past could end up coming back to haunt you.
- Losing focus. Whatever you do, it is paramount to never lose track of your goal. What are you trying to achieve with your business? Do you have enough understanding of your market and its nuances?
Learn the Strategies to Succeed
One of the most common mistakes first-time founders often commit is leaping headlong into a business idea without looking at the big picture. To start a business, you have to get three things straight—raising funds, building a business model, and acquiring customers.
Many founders fail to conduct proper market research. It is always important to determine whether there is a viable market for your product. Where do you intend to set up your business? Is there enough interest in the niche you have in mind?
You need to study the economic, financial, social, and cultural data of the niche you want to penetrate. This includes knowing and understanding your competition so you can better provide your potential customers with a unique value proposition, setting your product apart from hundreds, if not thousands of competitors.
Common Mistakes First-Time Founders Should Avoid
Committing mistakes is unavoidable. Entrepreneurs are no exception, but they can certainly learn from them. Here are some of the most common sins most first-time founders commit:
1. Not setting priorities. Focusing on too many things at the same time is a recipe for failure. It is important to learn to prioritize what needs to be done first.
2. Overworking yourself. It is understandable that you want to pour all your time and energy into your startup, but this can often lead to stress and cause burnout.
3. Setting unrealistic expectations. Having a goal is essential, but if it is too far out of reach, this may prove to be a problem. It is always better to work on achievable goals step by step.
4. Failing to differentiate between survival and growth. A startup needs every bit of your attention and guidance, but it’s easy to get lost in the day-to-day challenges and forget your business goal. It pays to take a step back from the daily grind and look at the big picture. Your business needs to survive but also grow.
5. Lack of communication. If you have a team of people who help you run your business, there is a need for constant communication to ensure everyone is on the same page. Failure to communicate can lead to misunderstandings and create problems that may prove hard to solve in the long run.