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Five Completely Avoidable Reasons Startups Fail

23 May 2017 No Comment

Startups are a lot of work, and that work almost always falls on the shoulders of one or two people with a dream. Even with a business plan, you might find yourself learning more about intellectual property rights or studying up on the day to day costs to run a business in your industry. When you’re in the trenches, it can be hard to see a path forward. Here are some mistakes lots of startups make that are completely avoidable.

They Fail at Bookkeeping

It’s easy to fail at bookkeeping if you’re not very detail oriented, or if you’re busy with production. It’s often worth the investment to hire someone to help in this realm.

Anderson Bradshaw, an accountant salt lake city businesses trust, suggests keeping detailed records of income expenses and anything else needed on the tax return. The better your records, the less you pay out. It’s also a good idea to keep records for at least seven years, in the event of an audit. With digital records, it’s easy to port old returns and books to the cloud (with Google, Dropbox, Microsoft, or any of a number of services doing the heavy lifting).

They Fail to Find Affiliates

Affiliates do a lot of the heavy marketing for you, so you can focus on doing what you do best. Plus, smart affiliates can build brand loyalty.

Affiliate marketing is a complicated beast. Make sure you give the affiliates the resources they need, including visual assets, to gain sales. That means doing your own testing and promotional work first. You can work with affiliate marketplaces, which may be easier but lead to fewer active affiliates, or you can reach out directly to new prospects. This will have a lower success rate and may cost a bit more upfront, but you’ll have active and loyal affiliates that will pay off for the life of your business.

They Fail to Gain Customer Trust

Customer trust is a flimsy thing. One bad shipment or breach of security and you could lose revenue rapidly.

Focus on your business’ rating around the Web, and create alerts so you’re aware when someone begins to complain about your business. You can see if any major concerns are gaining traction on social media, or if any blogs or news articles were written about the problem. You can also be proactive, identifying your biggest advocates and giving them the resources they need to promote your brand.

They Fail to Acquire Additional Capital

One surefire way to die is to stop growing. The Small Business Association has a great resource for low-interest loans and government grants you can use to fund your ideas.

Don’t rely on growing sales if you can’t expand your sales team. Don’t become discouraged because you can’t take on more of the paying work your business needs to thrive. Those are good problems to have, and with some financing on your side you can work toward solving them. Low-interest loans are available with good credit, which helps alleviate some of the pressure that comes from taking them.

They Fail to Acquire Good Talent

Steve Jobs said, “we hire smart people to tell us what to do”. Failing to acquire good talent ensures your inevitable fall.

The final mistake startups make commonly is failing to let go of people who aren’t furthering the business to make room for employees who will. If you can’t trim that fat, you won’t have a budget for those valuable new hires you need to excel. Good leaders can balance those needs.

 

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