Founding and operating a startup can be a scary, stressful, and challenging process that causes a lot of novice businessmen to buckle under the pressure. While you’re conceiving the idea for the company, brand, or product, it always seems like everything will go just as planned, and optimism is generally strong among all the parties involved. However, after the business actually launches and it’s time for the show to start, it is quickly realized that there are a lot of factors that weren’t considered.
Unfortunately, new clients, competitors, and your company’s monthly expenses will not wait until you refine your business practices in a lengthy learning process, so you really have no choice but to quickly adapt if you want to keep a startup afloat. If you’re facing a similar predicament, consider the following seven things you can do to keep your startup from going under prematurely.
#1. Become Familiar with the Causes of Startup Failure
First, you can avoid most of the common mistakes made by startups by simply researching the common causes of startup failure. By examining the shortcomings of previous startup attempts in your industry, you’ll be in a better position to prevent the same downfall from happening to your company. The saying “history repeats itself” reigns true for a significant percentage of startups, but learning from the mistakes of others to pave a new path has always been a viable alternative.
For starters, a few common causes of startup failure include inadequate or over-committed funding, poor staffing, failure to patent inventions and bad budgeting and/or task scheduling. If you heed the rest of the tips in this guide you should be able to avoid most of the aforementioned shortcomings.
#2. Hire an Accountant and/or Budgeting Professional
Proper math and accounting are incredibly important for any burgeoning business on a budget. If you’re not confident in your own ability or the ability of your staff to calculate, devise, and plan out a suitable budget for the business, then it would be wise to immediately bring a budgeting professional and/or accountant on board.
Every single expense, investment, sale, and other transaction needs to be reported and recorded in a detailed manner right from the beginning. This data can then be used to construct more accurate budgets, while also giving the business material to present to investors in the event that additional funding is needed to facilitate the expansion of the company after some level of success is achieved.
#3. Failing to Consider Intellectual Property Rights
If your startup is banking on the success of innovation in the form of new inventions and products, it is imperative that you take the necessary steps to safeguard your intellectual property rights by filing for the appropriate patents in a timely manner. Doing this independently can be a somewhat confusing and time-consuming process for the average startup owner, who is usually too busy to get involved in this aspect. Thus, if you want to make sure your business is fully protected, it would be best to hire a professional attorney that specializes in intellectual property rights.
#4. Hire the Right People, Sparingly
A startup needs more than a huge roster of good employees, it needs a small group of great employees that aren’t going to drain payroll expenditure and training resources unnecessarily. Hiring and training the staff for your startup can take up precious time that could be allocated to other more important tasks, and there’s always a risk that you could be hiring people who will not operate in the best interest of your company. Don’t pay someone to ruin your business, hire the right people from the start.
#5. Know Your Competition and Do Your Research
Unless you’re coming out with an entirely new product, service, or industry altogether, chances are you’ll have some competition to contend with right from the beginning. Furthermore, your competition will probably be more established and have more funds at their disposal than your startup. The only way you’ll be able to compete, and the only way you should even try to, is if you have already done the due diligence to research how your offerings will be better than the leading competitors’.
#6. Set Goals, Milestones, and Deadlines
As the owner or manager of a startup, it can be easy to feel relaxed because there’s no boss or supervisor over your shoulder making you do anything you don’t want to. While this type of freedom is one of the benefits of having your own business, it can also be a huge hinderer of productivity if you allow yourself to become complacent without any sort of guidance or daily purpose.
Thus, creating a strict schedule complete with milestones, deadlines, and short-term and long-term goals, is absolutely imperative if you want to ensure that your startup’s resources are being put to good use on an ongoing basis.
#7. Don’t Over-Invest in the Beginning
Another common money-draining mistake many startups make is over-committing their personal finances, or taking out loans, to over-fund the business in the beginning. It can be easy to take the overzealous approach financially and look for every lender that will be willing to invest in the future of your company. While funding the business is certainly important, there’s a fine line between getting the company the components it needs to succeed, and over stretching your resources to put your startup into a pile a debt it won’t be able to recover from.
The Most Important Thing to Remember
Finally, above all else, remember that discipline and realism are two attributes that most successful startups possess. You need to be able to realistically project what the business is capable of, and bring those projections into fruition through consistent discipline. Run your business from a data-based perspective and stay persistent with what you’re trying to accomplish, and you’ll have an opportunity to be one of the relatively few startups that goes on to become a huge success within the first 5-10 years of operation.
Images: “The drowning man. The man in water asks about the help./Shutterstock.com“
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