Coming up with a great idea? Easy. But taking that buzz and building it into a company with longevity? Now that's another task entirely. While it's true that failure is part and parcel of entrepreneurship, too many startups fall victim to early mistakes that halt growth before they even have a shot.
These failures aren't the inevitable result of taking risks in a volatile economy, but rather, the outcome of hasty decisions made by impatient business owners. Luckily, many of these mistakes are as easy to avoid as they are to make. If you want to build a business that lasts, here's what not to do.
Not doing enough market research
Your idea is groundbreaking, but does anyone actually want or need it? Validating your business idea through market research ensures you don't waste time and money pursuing a dead end. Market research methods
Relying too much on social media
Social media marketing
is cheap, easy, and effective — what's not to love? But while social media can be a great tool for building brand awareness, it's not the be-all and end-all of digital marketing. In fact, relying too heavily on social media marketing could cost you: Social media's conversion rate
is a lousy 0.71%. Compare that to 2.5% for paid ads, 3.75% for Google ads, and 16% for organic search and it's clear you need more than social media in your digital marketing strategy.
Ignoring the financials
Some things, like marketing, are worth investing in. However, that doesn't mean you should spend blindly when building your business. Cash flow problems are the single biggest cause
of small business failure. Cash flow problems occur when entrepreneurs fail to budget. Before long, the business is out of cash reserves and struggling to pay its bills.
It's not enough to set a budget. You also need to stick to it, which means keeping an eye on your financials at all times. That won't happen if you're manually logging data into spreadsheets, so invest in small business financial reporting
that seamlessly integrates with banking and sales platforms. This not only gives you real-time insights into profitability and cash flow, helping you make good decisions and create a spending roadmap, but it also makes your accountant's job a lot easier, too, by keeping him or her in the loop with email updates and customized reporting.
Making hasty hiring decisions
If there's one fast way to waste money, it's hiring the wrong people. While you can't guarantee a new employee will be a great addition
, there is a lot that employers can do to avoid a bad hire. Instead of hiring solely on skill or network connections, consider your company's core values and search for people who share them. You can develop hard skills, but it's far more challenging to change the way an employee communicates and collaborates within a team.
Going it alone
As an entrepreneur, you know how to get things done. Capable as you may be, trying to do it all yourself is a foolhardy move. It takes a diversity of talents and ideas to make a company succeed. That includes both hiring quality employees and surrounding yourself with mentors, co-founders
, and experts who excel in the areas you don't.
Whether your business is digital or local, it's also worth joining your local chamber of commerce. While there are lots of excellent entrepreneurship communities online
, local mentorship, networking, and support remain an important part of any entrepreneur's development.
There's starting a business, and then there's building a company. If you want to turn your great idea into long-term success, don't jump in before doing your due diligence. From refining your business idea to surrounding yourself with people invested in your company's success, these tips will help you start up and get ahead.
Need help bringing your business idea to life? Whether you’re looking for an app to streamline workflows or technical assistance designing a custom software solution
, Cobuild Lab can help. Get a free consultation at CobuildLab.com
. (786) 991-3467