StartupTalky

Tag: Proper Business Planning

  • 13 Common Mistakes That Startup Founders Make in Their Business

    ‘Money can solve anything’- this is the first thought that comes to the mind of most of the startup founders. The startup founders live in the biggest myth of life that, once they have funds for the business, their startup will automatically run. This is the biggest lie and one of the common mistakes that startup founders make and that has ruined many great startup plans. The seed funding is the first step in the path of a successful startup, but never assume it as a final destination, because the road is very long after this. Launching a new startup is like a raising baby. After the launch of the startup, comes the biggest responsibility. You need to plan the whole life of your baby and provide everything to them. So just like it, after getting the initial investment, planning and using it properly to boost the startup is important

    When you are beginning with your startups, with all your excitement and passion, the only thing that you want to concentrate on is how to become successful. You do every possible thing to achieve your dreams but being an entrepreneur is not an easy job. One needs to burn their midnight oil for that. While being an entrepreneur, there are mistakes one can make which may disrupt the process of reaching the top.

    Numerous startup founders fail to manage it after the seeding step, as they had utilized their all energy in getting the funding. The startups usually fail because they fail to deliver their promises and fail to manage their team. These are the two major reasons behind the downfall of many startups. However, they are not only mistakes made by the startup founders, there are many other common mistakes that startup founders make in the bucket. I have rounded up a few mistakes that you need to avoid at any cost to be successful. In this article, we will talk about the Common mistakes that Startup Founders make in their businesses.

    Overthinking and Underthinking
    Wrong Investments
    Poor Planning
    Incorrect Estimations
    Decision Making
    Hiring
    Being Organised
    Avoiding Suggestions
    Neglecting Budget
    Marketing
    Confusion
    Forgetting About Bookkeeping
    Unwanted Expenses

    Overthinking and Underthinking

    Thoughts should be big and the start should be small. Overthinking in terms of business may affect the revenue and process of work, plus it doesn’t help you in reaching a conclusion or solution to your problem. Instead, it leads to the creation of problems that are not even there in reality. Decisions should not be risky and should be taken after thinking and evaluating the entire situation properly but too much overthinking can lead to a missed opportunity.

    On the other hand, underthinking any situation is also one of the main causes that may affect the business. One needs to dwell deeper, when there is a need, rational thinking is needed so that effective leadership can be formed.

    “Take time to deliberate, but when the time for action comes, stop thinking and go in” – Napoléon Bonaparte

    Wrong Investments

    In terms of startups and new entrepreneurs, investment is quite a big concern. Be aware of your expenses and savings. Higher Investments in a product without assuming the demand may damage the economy. Investments should be made after analysing the demand for the product.

    Poor Planning

    Everything needs a plan, especially when you are starting a new business, planning becomes mandatory. The plan will guide you through every stage, it is like the GPS that will take you to your ultimate destination. However, wrong planning can create havoc in your dream business. Rough ideas for saving money should not be encouraged, it can cost you your dreams. Pre-planning for saving money should be made keeping the situation in mind be aware of your target audience and concentrate on making products and services according to them.

    Incorrect Estimations

    Estimations of cost should be appropriate. Underestimating the order for developing the business may lead to loss of money and affect the financial state of the company. Thoughts should be appropriate to the situations which include time, surroundings and environment of the market. Always estimate the value higher than that of the original price to keep any sudden expenses in check.

    Decision Making

    While taking decisions entrepreneurs should take care of the situations they face. One wrong decision can lead to the death of your dream startup. The decision should not be risky and made at the right time. Taking risky decisions at the beginning stage should be avoided in order for better growth.

    Hiring

    The hiring of the staff should be less during the initial stages. A huge number of staffs in the starting point with less amount of work will cause a crisis at the time of salaries. Hiring a fulltime staff when a part-time can do the job perfectly is unnecessary.

    “It’s expensive to hire the wrong people. If they leave it’s expensive. If they stay it’s expensive.”― Nathan Mellor

    Being Organised

    Avoid being unorganized. You have to follow a procedure in order to make your startup work. Have your plan and goals sorted in your mind. Jot down on paper your list of priorities in order to stick to the plan. Maintain an organised format for all you want to accomplish. When you begin with a startup, a number of things happen at a time, so listing them according to your priority and then finishing them is the best you could do.

    Avoiding Suggestions

    Don’t avoid suggestions and decisions that people give. Learning from the experts always helps to avoid some loops in the field of A particular business. a person with experience can definitely be of your help if you decide to listen to them. The words of the peers should be paid heed to.

    Neglecting Budget

    Maintaining the budget should not be neglected. Planning on the budget in order to avoid spending extravagantly is required. The budget should be maintained for growth and development. Budget planning should be made locally so that it helps us to maintain the economic growth of the business. High budget tenders should not be encouraged.

    Marketing

    Marketing of the business should not be neglected, it is one of the most important factors for the survival of your startup. It should be clear and sharp so that it reaches the target audience. Marketing at the starting stage should not be very elaborate as these marketing conditions affect growth. A proper marketing strategy has to be made so that your business can be visible in front of your customer and they can get attracted to it.

    Confusion

    Avoid confusion in assigning work while maintaining the budget. Confusion may lead to stress which in turn affects progress. Confusion should be avoided in terms of marketing too. It should be straight so that people can get convinced easily. Creating confusion will only be haphazard for the business.

    Forgetting About Bookkeeping

    To utilize the money properly and keep it from wastage, make the required documents and accounting records perfectly. To avoid the common mistakes that startup founders make these points to be noted. Bookkeeping is a major part of a successful business. You need to record all the expenses and incomes accounts to tally the growth of the business. You need to record all the petty and big cash expenses daily.

    Unwanted Expenses

    You do many unwanted expenses in the daily course, which can be easily avoided or can be minimized. So identify those expenses and reduce them to a minimum level. Don’t spend money on the decor of your office to attract customers, as they are here for the product. Don’t hire unwanted employees like receptionists, if you are capable of handling your own business calls and making your own coffee.

    Conclusion

    Startup founders make many mistakes after getting the seeding. While building a business, mistakes need to be avoided. Although mistakes are a part of our life and they are inevitable, it is important to avoid these mistakes that will do nothing but lead to problems in your business. Even when you make mistakes, learn from them and try to not repeat them.

    FAQs

    What causes startups to fail?

    Most startups fail due to insufficient financial resources.

    What percentage of startups fail?

    90% of startups fail in the first 5 years of the company in India.

  • Siddharth Chaturvedi on How Not to Lose Your Patience While Building a Startup

    An opinion shared by Siddharth Chaturvedi, Founder and MD, Boys and Machines.

    Buckle up to start your journey in building a business from scratch. The culture of start-ups is very central and flows directly from the founder. A comparatively smaller team set to achieve the same goals and align to make a difference in a sector of their choice. The startup trend in India is not a new thing. The purpose has diverted but the business values and beliefs remains the same. Corporate practice in India grew after the dotcom years at the turn of the century.

    Coming specific to the automotive sector, the pre-owned car market has been unorganized for decades. Cars used to sell through word of mouth and the buyer was about 50% unsure of quality or value he is getting out of the deal. We all relied on the known mechanic to check out the car before nodding on the deal. It was high time to organize this gold mine of a market to cut down middleman and provide value to customers with the right quality at the right price.

    Having the right state of mind and believing in yourself are the pillars to make big things come alive. Patience is one of the strong foundations that propels the power of compounding in action. Sometimes, you become overwhelmed when things may not work out at the start.

    While starting Boys and Machines, it was always a challenge to strike a fine balance between keeping your expenses low for longer sustainability and to hire the best possible team to ensure the back bone of the organisation is solid. At the end of the day the biggest reason for failure of an organisation is either higher expenses or a weak team to deliver steady results and manage the load. As our business model uses rented properties, it was painstaking to figure out the right showroom locations at reasonable prices. The process of choosing the right locations for your business can become lengthy and you have to make many decisions along the way that can either make or break the new organization tight on cash. Hiring the right people for different departments is even tougher. Because you have limited resources and the decisions become heavy. It is the team that builds the organization and the strain to get the team right needs patience and determination.

    At the beginning days, we were into a lot of planning. We gave impeccable attention to detail on every little task and that gave us the confidence that things might work out. The planning phase is very important to gain confidence. When you put your thoughts on paper and do research, confidence flows! A team that understands your vision and are ready to give the sweat to make to convert that vision into a mission and materialize it, confidence builds up. These two aspects can help you not to lose patience while starting up your organization.

    Now, it can happen that the results you are actually getting is away from projected expectations. And believe me, you will never be satisfied as your hunger to grow also increases with rising sales. We strive to grow every day as a team and the only game plan that we have is to give our 100% as a team every day and face, tackle, and over-come challenges that show up. Hard work beats talent when talent doesn’t work hard.

    When running a competitive high-stake business like luxury pre-owned cars, keeping patience is of prime importance. Losing patience just results in narrowing your mind which makes it difficult to find solution. The higher the stakes the more patience you need to have as it gives you a stable mind to assess the situations and come out of them.

    Business is all about keeping an open mindset and work with your eyes and ears open. Grab opportunities and tackle difficult situations. One tip is to don’t get overwhelmed on either sides of the spectrum. When the business is not materializing as expected, put down your head, figure out what is going wrong and work out solutions. When the business is booming, keeping your heads straight focus on maintaining the momentum. Let the power of compounding do its work. You just need to ensure you are doing the right things at the right time.

    To all the newbie entrepreneurs who are ready to take the challenge of starting-up and making a difference, be patient your time has come. You are already set out to achieve great things when you made the decision of starting-up. Get your home-work done by doing a thorough research on the business you are planning to scale. A very good practice that gives you good knowledge is to work under someone who is into same industry to understand the things which you would have to face once you start your own venture. The work will help you understand the business better and you can learn things that can multiply results.

    Secondly, keep your expenses minimal. You may churn out some cash right from the start but the cash outflow should be minimum to maximize re-investment opportunity. Again, the compound effect works well! Let it do the hard work for you. You just want to ensure that the business has enough cash when required.

    And last but not the least, give your 100% to the venture you are set out to start-up. Hard work is a necessary and everyone should go through the struggle phase. This will make you strong and give confidence to make better decisions when the time comes and huge resources are at stake. All the very best!