The leap from being an employee to starting your own business is big; it’s huge. You are leaving the world of having a steady and regular income and paid vacations and entering a world of uncertainty. Statistics show that 20% of small businesses fail in the first year, and only 50% see their fifth birthday. So how can you avoid the pitfalls that so many small businesses succumb to?
Here are five mistakes to avoid when you are starting your own tech startup:
Not enough business acumen
You know that you have the technical skills to make your business a success, but do you have a business mindset?
- It’s hard to know how to competitively price your products and services and still make a healthy profit.
- It’s hard to look at your business objectively when things aren’t going to plan.
- It’s hard to control growth and customer demand.
Every decision that you make in the early days of your business will influence its longevity. You need to be able to make strategic decisions that will help your business grow. Cash flow is a major problem for young companies, and so enrolling on a course can help to give you the tools to make the right financial decisions. Suffolk University Online is one example of a course provider that will develop your critical thinking skills, understanding of accounting principles, and business acumen. The great advantage of an online course is that you can earn while you learn.
Not focusing on the customer
When you first start out in business, your focus and motivation will be your revenue and profits. However, this is a short-term approach that does not give you long term results. To transform your business from surviving to thriving, you need to focus on the customer – without them, you have no business!
You want to tell customers why you think your venture is the best tech business to deal with; you know a lot of information about the industry and are keen to share it. However, while all this information is interesting and gives your business credibility, guess what?
Customers don’t care about the letters after your name or what school you went to.
Customers don’t care too much about why you started the business.
They just want to know how your products and services are going to help them overcome challenges that they are experiencing; that is it.
Your website can include your business’s whys and history on an About page, and you can keep your industry knowledge for a blog, but the other pages should be devoted to providing solutions to clients.
Everything that you do has to be focused on the customer. If your customer feels that you understand their needs and you can provide a solution for them, your brand will flourish.
Not focusing on a niche
For your business to be a success, it is best to focus on one or two skillsets. Why? Because it enables you to become a specialist for those areas. If you think of a spray gun and compare it to a sniper, which one has more success?
Developing a niche business also makes marketing a whole lot easier. You have a smaller set of consumers to focus on, and you can create a business that provides solutions to their challenges without compromising the opportunities to appeal to a broader market.
Once you have established your business as a specialist in your niche area, you will be able to introduce other services. Cross-selling and upselling are the natural progressions and the key to creating growth and developing a sustainable business.
Not outsourcing tasks
When you run your own business, you have lots of hats to wear. You need to be able to market your business, do the accounts, and negotiate with suppliers and clients. That’s a tall order for anyone, and for your business to be a success, you need to be able to fulfill each role to a professional standard.
It feels counterintuitive to outsource tasks while you are in the startup phase of your business, but it is a cost-efficient way to free your time so that you can focus on revenue producing activities. Here are three areas that can be outsourced:
- Administration – virtual assistants can help take the strain of running your business.
- Website design and digital marketing – your online representation can be managed and optimized by external agencies.
- Delivery – stock control, storage, packing, and dispatch of goods can be managed by a third party.
Another benefit of outsourcing is that you can set a deadline; procrastination is a significant factor in small businesses not achieving their targets and goals.
Not paying yourself the right salary
When you start out in business, it can be hard to gauge how much money you should pay yourself. It’s far easier to calculate the salary that you need to pay someone else!
When you are starting a business, you will find that you work long hours, and many of them are unpaid, but underpaying yourself is just as detrimental as overpaying. You need to make sure that you have enough money in the bank to honor the business’s financial obligations before you consider your own wage. A safe way to calculate the money you should take from the business is to pay yourself a percentage of the profit. This way, you will not risk jeopardizing its financial health.
There are many challenges to starting a business, and there are even more to making it a success. By identifying a niche area to focus on and researching your target audience, you will be able to tailor your business to meet their needs. To build a sustainable tech business, you need to be aware of where your skills are and where you need additional help. A business course can equip with you with skills for the long term, and outsourcing the tasks will help you to deliver a polished business for your customers so that the profits keep coming in.