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Startup is the most sensitive phase of business. This phase must be well planned and well handled. This is green shoot phase of business. At times a startup founder makes certain mistakes which can be fatal. These mistakes can be tough to handle as well. Knowing the probable mistake is the best way to avoid those.
I am noting here set of eight mistakes which can be fatal for a startup
1. Wrong location of business: Location of business is very important. One has to select right location of startup. By this I do not mean a posh location or an expensive location. What I mean is a location from where startup operations can be well executed. Certain startups are perform well when located near supply chain. Certain types of startup companies prefer proximity to customer. Some prefer in middle of market and so on. This decision has to be taken by the startup founder well in advance. Wrong location can increase transport cost and carrying cost. Also, a location with proper infrastructure is recommended. Location with improper infrastructure can act as a hindrance in operation.
2. Raising too little funding: Funding is required for startup of business or setting up of manufacturing unit. This might be a relief for service sector as cash handling can initially sort the fund-raising issue. At the time of fund raising, startup founders make a mistake of raising too little fund. This can act as killers. If the fund raised are too little, the right expansion or start of operation do not happen. This leads to the improper business module or even compromise in output quality. Moreover, pressure of returning the fund too piles with time. It is important for a startup founder to find the exact amount needed for the business planned.
3. Hiring wrong people: Human resources are most important resource for any business. It is also the most sophisticated resource to manage. This resource acts as key for any types of business unit. This resource needs to be selected with utmost care. Vision of employee must be in sync with vision of the company. If the situation is otherwise, then it could be a disaster. So, hiring a wrong resource can act as an expensive mistake for the company.
4. No or bad planning: Planning is blueprint of future action. A startup founder has to be a meticulous planner. Whole business runs on this. The trouble starts if a startup founder do not make a plan or do not make a proper plan. This is can call for a disaster. Many people even claim to be doing good without a plan. That cannot be true. Plan keeps focus of long term and short-term goals. Without a plan sort term goals may be achieved, but long-term goals go for a miss.
5. Wrong Target Audience : Selecting target audience is important for any business. These target in later run become prospects or referrals. So, targeting wrong set of people for business product can be troublesome. Wrong set of people might not get converted to prospect even after hard trial. This will lead to wastage of resources. So, selection of right target audience is important in business. This increases the rate of materialization.
6. Poor management: Management of the firm is quite important. This becomes the deciding factor for business success and execution. A good and well-organized management is a blessing for the organization. Poor management is a total disaster. Improper management activities can ruin the organization. This is make or break module.
7. Selecting wrong technology: Technology is a boon for any business. All businesses are in need of various technologies. Some technologies are suitable for some business and others are for some other. So for a company right selection of technology is important. Technology comes with a cost. Wrong technology selection will be worthless cost for the company
8. Selecting wrong co-founder: This is a very crucial point. Right co-founder can lead the company to greater heights. But wrong co-founders can be the biggest mistake. Wrong co-founder can lead the company to the downward slope. If wrong person becomes the co-founder, then he or she become the co-owner of the company. This mess can be too difficult to clear at times.
So as a startup founder, one must take a note of above points. They should plan to avoid these mistakes.
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