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March 20 2021 - Building a startup can be an unnerving endeavor, especially when you consider the statistics floating around out there: only 1 out of every 10 startups will make it past the 5-year mark - not to mention the drain it can be to your resources, materials, or otherwise; but the payoff can be huge. After all, every conglomerate needs to start somewhere.
Even experienced entrepreneurs can fail at their startup ventures. Itís not just about luck, it is also about being prepared and covering all your bases. There are common pitfalls that startups fall prey to that can be avoided had they been more aware or prepared. There are things that startups most definitely need to stop doing if they are aiming for longevity.
Things startups should STOP doing
Not paying attention to legalities
Every business is governed by the rule of law and business permits are part of the course. Business sophomores tend to not pay as close attention as they should to these things. File and fill out the proper business permits, register your startup, get insurance, and do not forget to protect and secure your intellectual property. There can be dire monetary consequences down the line if this step is overlooked.
Not hiring a bookkeeper
Startups tend to want to do things on their own, often to make sure that they stay within their budget or to just save a bit every month. However, not having a bookkeeper can be a costly mistake. Every business needs to have good bookkeeping habits. Not only will having an actual bookkeeping process ensure that you are paying your taxes right and on time (thus avoiding tax troubles), but bookkeeping also gives you an accurate idea on how your startup is doing money-wise. Bookkeeping can help you spot opportunities for expansion, help in decision-making, and spot potential problems before they actually happen.
Not hiring the right people for the right job
Now this is a tricky one. Hiring someone is always a risk. This is why you need to pay close attention to the hiring process. You need to know what roles you need to fill and what skill set is required for those roles. After you have that figured out, you need to figure out what kind of people you want to fill those roles. Hiring is not just about skill, but also about attitude - and it is a balancing act. You want to hire people with the right skill set and mindset for the jobs you have available, people who can deliver but can also go the extra mile for you. Remember that employees make the company. You would want the right people representing your startup to your customers.
Not paying yourself right
It is tempting to either underpay or overpay yourself. A startup usually has financial constraints and startup entrepreneurs often see their own salaries as an area they can save on. Pay yourself, and pay yourself right. Youíre working too, probably harder than youíve ever had to get your startup off the ground.
There are mistakes that you need to avoid making in your startup. Keep an eye on your capital and manage it well. Your employees are your companyís lifeblood so pick the right ones, and always cover all your bases, especially the legal ones.
About the author
Arleen Atienza has been writing for several organizations and individuals in the past five years. Her educational background in Psychology and professional experience in corporate enable her to approach a wide range of topics including finance, business, beauty, health and wellness, and law, to name a few.