Did you know that 90% of startups fail within the first five years? 45% will close their doors in the first six months. 62% of startups fail because of conflicts between co-founders. Clearly, the numbers are not in your favor.
That doesn’t mean you shouldn’t try.
The world is waiting on what you have to offer. Your chances of beating the odds and fulfilling your potential as an entrepreneur are much more likely if you heed the following warnings and avoid pitfalls that cause most startups to fail.
Expect the Unexpected
Entrepreneurs tend to have a glass-half-full mentality. They need to see the possibility in order to charge ahead into uncharted paths. This can also create blind spots. Since life rarely unfolds according to plan, protect yourself from the unexpected.
Set up systems and processes that allow the business to function in your absence. Downtime, vacations, and sick days are a part of the process. Plan ahead so you aren’t caught off guard. Create contingency plans for any conceivable outcome that may impact operations and work to build safeguards before you need them.
Unexpected outcomes can derail your progress in a way that may be unrecoverable.
Hire Slow and Fire Fast
You can do anything, but you can’t do everything. Building the proper team is essential to developing a sustainable operation. Take the hiring process serious and fill gaps in your operation with those who have the skills and passion to do what you can’t or would rather not.
This can often require relinquishing control of aspects of your closely nurtured enterprise. However, not doing so can create inefficiencies. For your business to thrive, you must be able to evangelize the mission and foster the strategic growth. These essential tasks will suffer if you are spread too thin.
Conversely, remove bad agents quickly. One rotten apple can spoil the bunch and negatively impact the morale and thus the productivity of your operation.
Keep Relationships Professional
Love can bloom among the long hours and intense working environment common in startups. Think seriously about the potential pitfalls involved in office romance – especially if the relationship sours. Separating emotions and work output can be compromised once feelings have been damaged. Keeping a boundary around work and romantic relationships will avoid tense, awkward and potentially legally challenging situations.
Count Your Pennies
Be ever mindful of your company’s financial health. Even if financial management oversight is delegated to a skilled professional or outsourced, entrepreneurs need to understand the business model be aware of the financial status at all times. Spend wisely and take calculated risks. Since the buck stops with you, know what money is coming in or going out will allow you to take immediate action if the cash flow slows.
Learn From Your Mistakes
Mistakes are a part of the process in building a business. Jonathon Ohaynon, founder and CEO of Brilliance.com, said in an exclusive interview, “Of course, I made thousands of mistakes. But that’s part of the process. I strongly believe, as soon as you think you ‘know everything,’ and learned enough to create repetitive success, you will immediately fail.” Mistakes are to be expected. The key is to learn from the mistakes so you are not repeating them, but growing and getting better.
Guest blog by Nick Rojas
Nick Rojas is a writer, entrepreneur, and consultation with a passion for emerging technology and amplification strategies to help businesses succeed. He currently resides in Southern California, with his German Shepherd, Pesto. Check him out on Twitter @nickarojas