Thursday, 25 January 2018

Startup Shortcuts That Can Kill Your Business

Creating a business is difficult and never for the faint of heart. It demands a lot of work and time.

Many entrepreneurs look for a quick fix for a number of problems they'll encounter as business owners. Unfortunately, many times these quick fixes will kill a business before it even gets off the ground. So on this note, here are some number of things startup experts and business owners said about mistakes that can kill a startup.
1. Hiring too many people too fast: One big thing here is, having the right team is critical for any business, but it's especially important for startups. Hiring managers should take the time to ensure they are making the right hiring decisions for their company.

"Many times, scale-ups grow so quickly that hiring managers forget to analyze what makes a successful teammate," said Patric Palm, CEO and co-founder of Favro. "Hiring managers at scale-ups must slow down and consider the attitudes, skills and values that make for a reliable and productive teammate in the long run."

It's also important to analyze whether you really need to make a hire. Ask yourself if it's necessary to bring someone in or if you could manage the work yourself.

"It's very easy to get tempted into hiring too many people too quickly," said Steven Pritchard, founder of Cuuver. "You might have a lot of work on your hands, but employees are a big drain on your resources."

2. Recruiting executives without startup experience: It's so important to have the right people leading the charge. Hiring the wrong executive could be detrimental to your business. A lot of startups make the mistake of hiring successful executives who have no experience leading a startup.

"Many startups look to recruit fierce executives from big companies to help get themselves off the ground," said Palm. "These executives are often eager to leave the enterprise scene and work for a hot new startup. Unfortunately, these execs have no experience inside an entrepreneurial environment."

Founders should be sure that the executives they hire have the right mindset and ability to adapt to the startup space, Palm told Business News Daily.

3. Failing to understand what customers want: Now...if you're selling something no one is interested in, you're not going to be successful. You should ensure you're providing something that people want or need.

"Chasing trends instead of solving real problems never ends well," said Lili Balfour, founder of Atelier Advisors. "Entrepreneurs who fail to fully understand exactly what their customers or users want will end up spinning their wheels and burning through cash."

Kerry Bannigan, co-founder of Nolcha Shows, suggests talking to your customers at each stage of your business. "Listen to what they want from your service/product and why they will pay for it," she said. "Ignoring this and following your own assumptions can be detrimental to your business."

4. Splurging on unnecessary solutions: Furthermore, palm said that when startups make money fast, it's easy to throw money at expensive tools or vanity purchases. While these tools sometimes provide a short fix, they typically aren't cost-effective in the long run.

"The problem is that many of these tools don't scale and will only solve short-term problems," he said. "The point is that, while it's important to grow fast, it's just as important to build a culture of frugal spending habits."

Kean Graham, CEO of MonetizeMore, agreed, saying startups typically leak cash through vanity purchases and initiatives.

"With success, founders tend to splurge on things that will make them look good that are not necessarily the best for the company," he said. "Some examples of these vanity purchases are expensive offices, flashy cars, famous PR firms or lavish company parties." Thanks for reading

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