Singapore has quickly become a start-up hub in Asia. Block 71, a building situated near the National University of Singapore, has been described by The Economist as “the world’s most tightly packed entrepreneurial ecosystem.” Given this robust environment, market saturation and fierce competition are part and parcel of putting up your own business. Whether a start-up busts or booms is dependent on a variety of factors. However, to have a fighting chance of survival in the feisty world of start-ups, it’s best to learn from failed businesses in order to avoid the mistakes they’ve made.
Launching too late
Over-thinking your business plan and agonising over the details can delay the launch of your product. The problem is, with an already saturated market, some other enterprising group can beat you to the punch. Risk-taking is essential among start-ups, and knowing when to launch a product is a big part of the battle. According to LinkedIn co-founder Reid Hoffman, “If you’re not embarrassed, you’ve launched too late.”
Prioritising profit over customer satisfaction
Getting impatient over turning a profit during a start-up’s infancy is a common trap, especially when the capital starts running out. However, the grave mistake is to focus on sales without giving your product the proper TLC. Remember that in the early days of a business, initial customers need to get invested in quality products so you can have their endorsements which equates to free publicity. What you don’t need are negative feedbacks rolling in. You may be making money, but if you fail to listen to the feedback of your customers, you may not be able to sustain your earnings. The presence of social media makes it all the more challenging these days to assuage unsatisfied customers. The solution? Make sure you have excellent products and services to begin with.
Hiring cheap labour over quality candidates can be a fatal error early in the game. A lean team needs all employees at the top of their game for your company to grow. So even if you it costs more to hire an experienced programmer, eliminating the headache of accruing problems along the way can end up saving you money down the line for tech support and maintenance.
Not enough capital
So you have a brilliant idea and you have enough capital to implement it. News flash: When you think you have enough funding – you don’t. Insufficient capital is a common error among start-ups and the reason why many close up even before turning a profit. Entrepreneurs flushed with idea of bringing in big bucks and being their own boss can fail to account for all the expenses involved in running a business. Others have unrealistic expectations about their market. This is where a solid business plan comes in. For the start-up noobs looking to blaze a trail in the big, bad business world, there are various start-up calculators you can consult to get a general idea about the expenses you could incur.
A lack of flexibility
Some entrepreneurs can get stuck on an idea, even after the market has already moved on. The inability to adapt and rework a product or rethink the strategy may end up killing your business. The key is being fast on your feet and flexible enough to go where the market is going instead of planting your feet and stagnating in the process. This is the strength of start-ups with skeletal structures and lean teams, they can easily transform; as opposed to huge, hulking corporations that are too set in their ways and are slower on the uptake when it comes to innovations.
As mentioned, agility and flexibility is a big advantage for start-ups owing to its diminutive size. Hence, the big no-no is to act like a big company with a small team. Sure, placing processes is essential especially for a growing business, but make sure the processes are streamlined and straightforward enough to avoid slowing down operations. And this is not limited to in-house systems, but the products and services you sell, as well. If you have an online flower delivery business, customers are naturally expecting ease of convenience in their transactions with you. If it’s more convenient for them to go to a shop and buy the flowers themselves, then you have failed.
Starting a business with the wrong reasons
Possibly the most notable mistake among start-ups is getting into business for the wrong reasons. Riding on the bandwagon or the hot trends on the market for the sure-fire profit even if you’re not a fan of the product won’t be good for your company’s longevity. Cliché as it may be, it is passion that will fuel your motivation to push your ideas forward. During economic lulls and facing challenges, believing in the product or the service you offer will get your brain cranking on how to overcome such trials. A half-hearted attempt, meanwhile, is a sure fire path to failure.