3 common start-up errors to avoid for ultimate success

The world of entrepreneurship is notorious for its high start-up failure rates. Your success as a new business owner begins with putting your idea into action and avoiding these common pitfalls.

There are many reasons why businesses fail, and many reasons why they succeed. But there are some situations that all start-ups will face at some point. Successfully navigate these three things, and your chances of start-up success will radically improve.

Start-up Error #1: Not standing out from competitors.

Most start-ups are launched in industries already filled with competitors. This is often because a lack of start-up funds means entrepreneurs need to look for quick wins in busy markets, but that’s not the only reason you’ll be facing competition. Even product and tech-based businesses that are doing something new and innovative will soon be copied.

So, how does this impact start-up failure rates?

If you’re launching in what’s known as saturated or over-traded markets, you’re competing against multiple other businesses for the same customers.

What many start-up owners do in this situation is discount their prices, believing they need to be the cheapest option to beat their competitors.

This quickly becomes a race to the bottom, with everyone discounting to make sales. In these situations, it soon becomes too expensive to offer the product or service and the company closes.

The lesson:

A good long-term strategy is important to make sure you really understand your customers and what they want and need. Loyalty is built when you can provide them with something of value, instead of just a cheaper option. This is key to building a successful business.

YOUR ACTION PLAN:

Identify who you think your key customers are.

Hit the streets and start speaking to them: What do they think of your concept? What would they pay for it?

Research your competitors through Google and by speaking to their customers.

Get your solution into the market as quickly as possible so that you can start testing it in real life. The faster you know what needs to be tweaked based on market and customer feedback, the higher your chances of success.

Start-up Error #2: Not strengthening your business skills and know-how.

Consider all the skills early-stage entrepreneurs need: business strategy, financial management, negotiating with suppliers, setting up distribution networks, marketing and sales, product and service delivery and operations, office management and, as the company grows, staff management.

The list is endless – and scary. And unless you’ve done an MBA, it’s unlikely you tick all the boxes by yourself. This is completely normal, but it’s also where successful entrepreneurs stand out, because they recognise their gaps and find ways to upskill themselves.

“I didn’t have a background in finance, and so I left everything up to my bookkeeper. I didn’t even know we weren’t paying PAYE. My business was in danger because I had a big gap in my skills and a bookkeeper who took advantage of that.”

Luckily, this entrepreneur didn’t lose her business, but it was touch and go. She persevered, brought her company back from the brink, and immediately did a basic accounting course, followed by financial management workshops.

“It was time consuming, but worth it. It was the only way for me to be truly in control of my own business,” she says.

The Lesson:

Financial mismanagement is one of the biggest areas start-ups in South Africa struggle with, but there are many other skills gaps that hold entrepreneurs back.

YOUR ACTION PLAN:

To get your business on track, employ an experienced and trustworthy Business Coach.

There are hundreds of business books and biographies available that offer real, tactical insights and advice.

Business podcasts are free.

Business courses range from free Udemy courses through to practical courses at every business school in South Africa.

If success is your endgame, combine your passion and business idea with the knowledge and skills you need to succeed.

Start-up Error #3: Letting burn-out get you down.

Starting a business is tough. Don’t let anyone tell you otherwise. It can be incredibly lonely, with long hours, limited sleep, and mountains of stress. Pretending you aren’t struggling isn’t a solution though.

“My last business had its ups and downs. In one of the bad periods a close friend asked me how I was doing. My immediate reaction was to tell him that everything was fine. Fine and dandy. Meanwhile, I had taken a pay cut, we were losing money and things were the opposite of fine.”

This entrepreneur’s reaction is common for start-up entrepreneurs. You’re positive, ‘get-it-done’ people, which makes you an ideal entrepreneur, but also unable to admit to how tough things are – even to yourselves.

When he finally opened up though, his friend did the same. He was struggling too – because starting a business is the toughest thing you’ll ever do.

After that, he started working with a business coach. He realised that his mental toughness would be a defining factor in his ultimate success. He needed the right mental tools to build his business and a trusted person to use as a sounding board.

The lesson:

Burn out is real. The good news is that you’re not alone. There are networking groups, coaches and mentors that can help you cope with the stress and loneliness of growing a venture. Support and balance are important in building a successful business.

YOUR ACTION PLAN:

Join a networking group or business association.

Your local chamber of commerce should be able to point you towards a networking group in your area.

There are many business groups on Facebook and LinkedIn.

From a mentorship perspective, who is in your circle who has more business experience than you? Ask them if they’ll become your mentor.

Learn more about working with a mentor or coach in this article, 3 Ways a business coach can super-charge your success

"Refuse good advice and watch your plans fail; take good counsel and watch them succeed." Proverbs 15:22 (MSG).

"Commit your actions to the Lord, and your plans will succeed." Proverbs 16:3 (NLT)