40 schoolboy errors start-ups make
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19. Pay thousands for a website you
don't need. Developers know that most people don't
understand what they do, and some exploit it. Don't get talked into
an all-singing, all-dancing show pony of a website if it's not what
you and your customers need. Depending on your requirements, an
off-the-shelf basic website or 10-page site for under £500 could
well do. Be clear what you want, write a clear brief, agree a price
and stick to it. Read this case
study and this one
to see what we mean.
Day-to-day business
20. Rush into a deal before properly
evaluating whether it's worth it. You can't do every deal
offered to you, no matter how good the opportunity. Carefully
evaluate how much time and cost a deal would incur and assess its
impact on your core business.
21. Get intimidated by what the big boys
are doing. They may be able to undercut you on price, but
they lack the personal touch. You can out-value them on customer
service, innovativeness, attention to detail, response time and a
whole plethora of other competitive factors. Don't resort to
slashing your prices - you can't win that battle and your whole
model will be undermined.
22. Don't keep in contact with potential
clients. Keep in touch regularly so they keep you in mind
for future business. A 'no' might be a future 'yes'. Keep records
of conversations and personal details so you're not starting from
cold next time you speak. Bring them into your social media conversations so they can see
other customers benefiting from your business.
23. Hard sell. Nobody likes being
aggressively sold at. It's off-putting and distances people. Give
people space and show how you can help them as well as take their
money and you'll have a far better chance of that happening. Here
are a more tips on how to sell.
24. Don't take negative feedback
graciously. Try not to be defensive. Use criticism to refine
your offering and make your business stronger. All feedback is
positive feedback if it's used in the right way. Thank people for
it.
25. Explain your business in 10 minutes rather
than 10 seconds. You should aim to describe your business is
as brief a time as possible. If you can't describe it in a sentence
you need to work on your proposition. The most compelling
businesses have bold mission statements and clear
propositions.
26. Stick too rigidly to plans. You need
to be flexible in business. Rewrite the business plan as and when
is needed to accommodate unforeseen obstacles and market shifts.
Read up on business planning for more info.
Money
27. Don't have a numbers person
on-board. Whether it's an accountant, an FD or a partner who
knows their onions, you need to have someone who can unravel the
numbers for you if you want to make money.
28. Don't look after cashflow. The
No.1 startup killer. Never lose sight of how much cash you've got
in the business and beware of overtrading too. Read our advice on money management.
29. Don't draw up a contract when
borrowing from friends, family or fools. Pre-empt future
disputes by getting it in writing. Read our feature on borrowing startup capital from
friends and family.
30. Forget to include something major on
your budget. Inevitable, so always have a contingency
fund!
31. Travel excessively when you could do
things remotely. It's important to meet people face-to-face,
but spend time establishing whether you really need to first. Use
emails and conference calls.
32. Overspend on office space. Do
you really need an office yet? And if so, do you have to have a
swanky city-centre set-up? Don't move out of home until you
absolutely have to. Getting an office is a hassle, and takes
extraordinary amounts of money and often a 12-month commitment. Toptable
founder Karen Hanton had a team of 12 in her kitchen before she
got commercial premises.
33. Rely too much on your
accountant. Sure, an accountant can guide you through the
complicated bits, do your tax returns and make sure everything is
in order. But you have to understand what's going on, every day.
Update your accounts at the end of each day. Get accounting software early on to
help. Read up on accounting help.
34. Ignore the advice of your
accountant. The flip side to overdependence on an accountant
is thinking you know better. Listen to them when they say you're
overspending or your profit margins aren't enough to sustain the
business. They're trained to spot trends you can't.
35. Forget to bargain on
everything. We mean everything! Trade your skills or
products with businesses whose professional services you need
rather than paying in cash. Always ask for a lower price.
36. Take investment too early.
Bootstrap on your own for as long as you can, then borrow when
you've proved your model and are ready to grow. You'll use it
better then.
The team
37. Try to do everything and control
everything. This absorbs far too much of your time, risks
frustrating staff and slows everything down. Delegate and focus
your time where you're most effective.
38. Recruit too soon. Avoid
fattening up unless you can quantifiably prove that person will
bring more money into the company than their salary costs you.
Consider virtual PAs and freelancers as alternatives to full-time
staff.
39. Don't sack quickly enough. You
can tell when someone's dragging things down. It rots a small team.
Make sure all new contracts have three-month trial periods and get
the deed done before then.
40. Don't share the vision. Staff
won't share your enthusiasm unless you invite them to share the
vision and the rewards. Incentivise staff to help you meet your
objectives.
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