As we have read in an article by Entrepreneur, the75% of new businesses close before two years oldis a high percentage and you’re probably wondering: Why? This is due to a number of factors, including lack of planning and administration. But, many StartUp that achieve success in a short time, end up dying just as quickly. In this sense, you must know what aspects can be counterproductive for your business and not be carried away by the good results. Find out how to make your StartUp a success.
What can make your StartUp fail?
1. No prior knowledge of the sector
A large percentage ofentrepreneursthey set out to open a business without doing any research on the type of market in which they are introduced. This translates into huge losses and stagnation in any project, since part of the success of a business is based on knowing the environment. It is very important to know where you can go to innovate in the sector, what is the competition and what they are most looking for, which will be the main consumers of your product/service.
2. Not having a well-structured business plan
It is very likely that when starting a new business you have that innovative idea and improvement of the product or service you want to offer; Lack of a business plan that allows you to mark that path we need to materialize the project can be fatal when it comes to entering and creating an impact on the market.
3. Make bad investments
There are many companies that start to spend their resources, even before they have generated profits. It is vital to understand that a business does not generate profits without having generated sufficient income to pay all commitments (employees, suppliers, accountant, tools…).
4. Inappropriate talent selection and recruitment process
Usually startups start from a group of friends, university colleagues, etc. people from a very homogeneous environment, with similar qualities, thoughts and skills. This is a mistake that seems silly, but it’s actually very common to happen. It can even cause a project to fail. When we talk about diversity in an organization, we are not talking about a color palette or flags, we are talking about diversity of ideas, skills, technical knowledge… that a company is a microcosm of a society. Different views tend to diminish biases, and with a broader view it is easier to be prepared for the difficulties that follow. From TalentFY we can provide solution at this point. The free-to-use platform unites companies that need to hire talent with the best recruiters or headhunters to search for this person, saving time in hiring. In addition, the Human Resources professional or CEO of the company will not have to analyze thousands of CVs, they will only receive resumes of professionals who have been previously selected. We can explain more about the features in a call. Want to know more? Click here
Is healthy to do , but on many occasions making commitments or buying things, which do not generate anything for the business, can put a company into bankruptcy.
5. Be absent from sales
We may have the best product or service, but any No sales company loses its target.An absence of sales may be due to lack of a communication plan or lack of training in the sales area; we recommend that, if you have shortcomings in this regard, you look for and hire expert professionals, not only in the field of Marketing, but also in the commercial and customer acquisition.
6. Having poor internal communication
It is essential that you establish an action strategy, but also that you maintain good communication with your employees. You cannot allow information to be lost between different teams and employees. It is normal that in business with many employees communication is affected, but it is essential that you take care of it.
We recommend creating spaces where employees can communicate freely with each other and also with you, sharing impressions and opinions can be very rewarding for your company.
At TalentFY, for daily communication between employees and management, we use the tool called Slack. It allows us to maintain fluid communication with the entire team, including employees who do remote work. Not only does Slack exist, there are currently many tools (Google Meets, Skype, Microsoft Teams, Google Drive, etc.) that allow you to improve and facilitate internal communication with your team, whether or not they work remotely.
7. Hiring the wrong people
All companies have ever made the mistake of hiring staff that it is not the right one and this can translate into economic losses and generate bad image of the company.
If you have a HR team it is very important that you maintain good communication with them and understand as well as possible the profile you want, that you enter to work in your business. If, on the other hand, you don’t have HR staff and you are the one in charge of recruitment, we recommend outsourcing: it has an economic cost, but it has many advantages in terms of time and quality.
Te recomendamos leer nuestra guía “Todo lo que debes saber si quieres externalizar tu selección de personal” para que puedas decidir si la externalización del reclutamiento es una buena opción para tu negocio.
Tips to prevent your StartUp from dying of success
Although the digital environment has been able to give your company very positive aspects and very good results, remember that we live in a world that stands on two pillars: ‘online’ and ‘offline’ In the same way that a fashion firm that has not been born on the internet can no longer ignore its existence, it is also not smart to do it the other way around.
It is considered as offline marketing those communication actions focused and transmitted from traditional media, such as television, radio, press, etc… tools that have a different logic than digital media. Although working in online marketing has been able to give you very good results, it is very important that you do not forget to pamper and pay attention to these other channels of commercial impact. The presence at events and conferences is another example.
2. Don’t lock your brand into a single social network
You shouldn’t lock up your StartUp only in RRSS, there’s a whole world out there and many people you can reach from other impact channels, not just social media.
For example, Zalando acquired a more aspirational character from the Bread & Butter festival in Berlin, decided to leave the internet and materialize his universe into something tangible. Zalando decided to organize this festival where his clients and potential new customers could access activities related to fashion and have a direct contact with the company (which until then had only acted online) It is very likely that there are potential customers who do not have security that can only contact you and your business online and through networks (or buy online)but they need to attend a real place and talk directly and face to face with you or your employees.
3. Capture new customers and loyalty to those you already have
This aspect seems logical, but tends to be overlooked. As we have already told you, it is important that your business has sales if you want to survive in the long term, but that does not mean that this approach makes you forget to take care and/or pamper customers who have already trusted in your business.
Even if you are constantly looking for new customers, you should pay attention to needs, feedback, opportunities for new collaboration… that can tell you the customers you already have. And, above all, we must retain them so that, once they have a need that your company can work and solve, they decide to trust you and your business again. They can also become ambassadors for your brand.
4. Be transparent and laugh at yourself
There is no really compelling reason why a company should hide its turnover or sales figures. Both investors and customers appreciate transparency in data communication. And not only do they appreciate the transparency, but your employees will also thank you, they will trust you more, if you do not hide the numbers and you are realistic with the future of your business.
It is also important to know how to laugh at yourself and not be too negative when there are bad results. You can create a bad environment in your team and put pressure on some of your employees. We know that it is important for you to get good results so that your business lasts longer, but it is very important not to make your team or you get carried away by negativity (which always ends up providing bad results).
And you: What reason do you think generates more bankruptcy in the StartUp? What do you think would be more positive for entrepreneurs to know to make their business survive in the long run?
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