Starting up a business is tough. Avoiding some of these fatal mistakes will make it that bit easier.
We all hear regularly of successful start-ups that made their owners fabulously wealthy. We’re less likely to hear of small businesses that have slowly fizzled out, or even failed to get their product or service to market. That’s just the nature of our media – unless it’s spectacular failure or success, they’re just not interested.
However, as most people don’t hear about ordinary business failures, they don’t get the chance to learn from them. The result is that different entrepreneurs consistently make the same or similar mistakes.
At DCA, we work with many start-ups through good times and bad, and we’ve learned a lot about the mistakes that can fatally injure an otherwise promising business. Whatever your business idea, make sure you avoid these key errors.
Everyone wants to conquer the world – those that actually do have their ambition tempered by patience. Be realistic in your projections for growth, and be prepared to revise these down if the market isn’t responding as you predicted. Over-extending yourself on an optimistic hunch can ruin a business that would otherwise thrive over time. You can check out a useful guide to scaling up successfully here [link] but, in the meantime, always keep your plans grounded in reality.
Telling ‘White Lies’
Particularly if you’re in a tough financial spot, it can be tempting to finesse matters – or tell white lies – to creditors, your bank, potential partners and even the Revenue Commissioners. This, we can say quite emphatically, does not end well. Books can be accessed and quite detailed enquiries can be made by the people you talk to, so the information you’re trying to suppress will usually get out. And when it does, trust can be broken entirely, creating a far worse situation. Tell the truth to people, because lies usually get found out.
Nobody starts up a business with a product or service that they know to be flawed. So, when criticism comes in, it’s tempting to brush it off and believe the naysayers “just don’t get it”. But criticism, constructive or otherwise, is important for refining and improving your business idea. Whether criticism is coming from friends or family, business contacts, your lender or your clients, take time to assess its validity – and whether you need to rethink things.
Grabbing Attention Early
Start-ups thrive on attention – it attracts potential customers, investors and partners. But in this day and age, the things that you say publicly will last online, and a record of rash predictions will outlive your business. Too often, we see perfectly promising entities going off half-cocked, telling newspapers journalists about the transformative change they will bring or the hundreds of people they will hire. Doing this before you have a model that works, a cadre of satisfied customers, and everything in place to realise your plans is a great way to make yourself look very silly indeed. So before you say anything to the press or online, make sure you can stand by your words.
Of course, some start-ups avoid all these mistakes and still fail to take off – nothing is guaranteed in business. but avoiding these classic errors will give your new venture a fighting chance.