By Brett Shapiro
As a business owner, you should understand that failure is almost inevitable. Failure can take the form of small losses, missed deals, or extreme cash crunches.
According to the US Bureau of Labor’s Business Employment Dynamics report, nearly 20% of startups fail at the end of their first year of startup. In fact, only 30% of new businesses survive more than 10 years.
Picture over mistake
Even successful companies build on a number of mistakes.
But what makes it successful?
Some entrepreneurs deny seeing failure as the end. They would rather use failure as an opportunity to learn, overcome challenges, and get stronger.
This approach to handling startup failures makes the difference between failed and successful businesses.
Do you want your startup to become a profitable business?
If so, here are some effective ways to troubleshoot startup errors and use errors to your advantage:
First things first: the key to success is good planning.
While most people only plan for success, it is important for you as an entrepreneur to also plan times when your startup may fail. You should plan ahead to make sure you can keep your startup going during difficult times.
To be prepared for tough times, let’s go over the most common reasons for a startup failure, including:
Missing fit for the product market
You should prepare to resolve all of these issues right at the beginning of your startup process.
Starting and running a business is not child’s play. There are many legal requirements and a lot of paperwork and reporting associated with running a business.
If you fail to adequately meet legal requirements, your startup can end up in legal hot water and cost you a lot of money.
So make sure your startup complies with the law from the start. This includes registering your business with the federal and state governments, filing annual taxes, and everything in between.
As a new business owner, you may find it difficult to do everything yourself. But don’t worry – GovDocFiling can help you choose and register the right entity type for your business.
They provide easy-to-use incorporation packages that make it easier for you to fill out state and federal filings and create other important legal documents.
However, you can also hire an accountant or business advisor to assist you with your startup’s annual tax filing and reporting requirements.
Every startup is driven by the market. You need to identify a problem that you can solve for your target audience and provide them with the solution they need.
Many startups fail due to a lack of market adaptation.
To ensure that your product or service is something that target buyers actually need and want, you should research the market.
By doing thorough market research, you can find out:
What are the main problems in your niche?
Can your product or service help people solve this problem?
Do other companies offer similar solutions?
Does your product cost too much?
Do people really need your product?
Is it the right time to bring your product or service to market?
Answering these questions can help you re-analyze the market demand for your product / service. You can optimize your product and marketing strategy accordingly.
However, it is best to conduct market research during the brainstorming phase of your company. This can save you a lot of time, effort, and money, and avoid mistakes.
Many startups fail because of a bad management team or incompetent team members.
Bad management and incompetence can lead to weak strategies, communication gaps, and bad business decisions and practices.
To avoid this, you should:
Hire skilled and skilled professionals who are best at what they do.
Establish an appropriate hierarchy to ensure that employees are accountable to each other and to the company.
Make data-driven decisions when it comes to strategy, marketing, and creating a sales funnel.
Find the right communication channels to make sure every team member is on the same page about business goals.
Provide transparency to build trust between management and the rest of the team.
Remember, it takes a village to start and grow a business. If you want your startup to be successful, your focus should be on building a strong, well-connected team.
New entrepreneurs believe that they can lower their company’s operating costs in the early years. But that’s only true to a certain extent.
Every business has financial needs that cannot be avoided or neglected. This includes:
Startup costs such as government filing fees, trademark costs, etc.
Overheads such as office rent, utility bills, stationery, etc.
Product / service costs
Customer service costs
Some business owners do not keep a record of expenses and cash flow so they are unable to take adequate financial action in a timely manner.
As a startup owner, you should always keep track of the accounts and know how long the company can run without external fundraising.
The best way not to have enough money is to raise enough money before starting your business. At the same time, you should invest the money wisely. You can allocate a specific budget to each department to limit business expenses.
Failure should be a stepping stone on your path to success.
You should learn from your mistakes, find ways to correct your shortcomings, and make informed decisions to help drive growth. That’s what successful entrepreneurs do.
In this article, we’ve put together a few ways to deal with startup errors and make them work.
Do you have any questions about startup errors and how to deal with them? Ask them in the comments below. We’d love to help you build and grow your business from the ground up.
About the author:
Brett Shapiro is a co-owner of GovDocFiling. He’s had an entrepreneurial spirit since he was young. He founded GovDocFiling, a simple resource center that takes care of the day-to-day but critical founding documentation for each new business unit.