The very fact that the potential pitfalls for entrepreneurs is broken into two articles might make it all the more daunting but knowing thy enemy helps avoid them. Recognizing and acknowledging when your start-up might be in peril gives you the upper hand in navigating obstacles. While the first article primarily addressed monetary concerns, this takes a look at the more operational hurdles.
It isn’t sufficient to assume money can cure all ills for life and it is the exact same for business. You have got to be a touch more sophisticated with foresight and strategy to mitigate your operational risks. Effective market research, dispute resolution planning and time management will go a long way towards covering your upcoming challenges but it falls on you to have those in place ahead of time.
Market Need… The Single Biggest Killer of Start-Ups
By now you will have gathered that there is considerable importance laid on market research. Passion, determination, hard work, creativity, ambition and all of the desirable entrepreneurial characteristics could sometimes be likened to putting paint on a rotting fence. It might look well but it is still fundamentally flawed.
42% of businesses fail because there is no market need. A lack of demand extends from nobody being interested in what you offer to too many suppliers with no discernable difference between them. Similarly, just because you are interested in solving a problem, doesn’t mean the market is interested in the solution.
A unique value proposition (UVP) is what separates you from the crowd. The title gives it away but your offering must be valuable to the market and obviously different. It is not enough to simply think you are better at serving a customer’s needs. It has to be clear to them and that what you do is better than the other options at their disposal.
Obstinacy Closes Doors
Without laboring the point, heeding your markets demands never goes away. As soon as you take your eye off what the customer needs and think you have it all figured out, substitutes arise… and it’s much more difficult to win customers back than get them in the first place.
Knowing what your competitors pride themselves on and what they compete over is valuable but when it distracts from serving the market need, you lose focus and sales. Your doctor wouldn’t prescribe medication based on what other doctors found popular, they prescribe what you need.
Early stage start-ups expect to learn a lot quickly, especially about the customers. You might think they value one thing but that can change. Be prepared to change with it. Rigidity and obstinacy scuppers growth and brand loyalty. It pays to have the agility to pivot. Shifting to what the market wants in order to attract customers is a necessity as user un-friendly products account for 17% of failures.
Take the example of Blockbuster. They were the most famous movie provider in the world until Netflix stormed into the picture. John Antioco, Blockbuster CEO at the time, had the opportunity to purchase Netflix for $50 million in 2000 but instead laughed them out of the room. The rigidity of the board would see Blockbuster filing for bankruptcy less than 10 years later. Obstinacy had cut them out of a brand now worth $125 billion.
Market When You Know What Customers Want
Market research provides a plethora of answers to questions you didn’t know you had yet. Among the answers are who the target audience is, what they want and how they currently get it. A huge problem with many start-ups is they expect because they opened, the world knows.
Start-ups often stumble upon the first few sales because people are interested in trying something new and exciting. Those customers are great but relying on that to carry through to a swell in demand is a dangerous road.
Once you open your doors, you should be letting everyone know how you are making their lives easier and what is unique about you. Just as a start-up can suffer with chasing shiny objects, they can use it to their advantage for picking up early sales and building momentum. Choose the right channels, the right UVP and the right audience and let the cogs turn.
Proactivity Solves Problems
Entrepreneurs regularly encounter different stressors, threats and issues. They can come from any angle but most only exist in passing provided they are treated. Threats come in all shapes and sizes from competition, in-house, legislation, suppliers and all sorts. Early identification reduces the impact suffered.
Seeing potential competitive threats coming down the line allows the creation of a strategy to deal with it affectively. Similarly, knowing governing legislation, standards or licenses eradicates the headaches suffered trying to pursue these retrospectively. Sourcing potential backup suppliers mean you are not at the behest of one supply chain. Prioritizing important tasks eliminates distraction and procrastination.
Even if something does go wrong, early identification and treatment are vital.
Mistakes are common among early start-ups and provide ample opportunity to learn. Don’t freak out! For example, when you see a negative online review, engage and address quickly. Find out what they didn’t like and adapt if necessary. Companies that are seen to interact with the clients actually get more hits online than those who don’t respond at all.
The same goes for issues in-house and specifically between founders. The conditions are perfect for them. Working hard, stressed and under pressure. Squabbles between founders are nearly the norm. Apple and Facebook both started out with at least two founders before volatility enforced exits.
Before starting out, you ought to be absolutely certain you are embarking on the journey with the right people. Often the cause of the difficulties is a clash of driven, hard-headed personalities who don’t work well together.
Assess and understand each other’s working styles, preferences, risk acceptance and other factors that will eventually matter. If you’re still confident, set some ground rules for potential disputes. The last thing any company needs is a divide and playing favorites as the boss in front of staff, let alone customers. Trusting each other to make sacrifices and have open dialogue circumvents the majority of problems.
Seek Out Advice
People nowadays are delighted to give their opinions in everything. The internet, to the dismay of many, has given a platform for every voice. As an entrepreneur, it fortunately means you can avail of assistance at the drop of a hat and engage an audience willing to speak up.
The humility to know you need help is consistently the biggest sticking point. It is the lesson cited regularly by second time entrepreneurs that they should have enlisted help sooner and more frequently.
It is easy to forget the many voices you listened to that got you to the point you are currently at. The university professors, colleagues, investors, customers or one-off random conversations all contributed nuggets of advice.
Leveraging your network is a crucial part of being in business. Building trustworthy, well-informed connections, who have the experience and knowledge to steer you in the right direction opens doors. A well placed connection can be invaluable to procuring investment, mentorship or even sales opportunities.
Entrepreneurship can be a scary place at times. Not knowing what is behind each door creates uncertainty and challenge but staying observant and putting in the, often thankless, preparation is the armour needed to weather the trials and tribulations. If all else fails, it’s worth remembering that the world is full of helpful advice and willing listeners. Asking for help is not the sign of weakness it can be painted as. It’s the difference between getting stuck in a rut and soaring to a new level of unexpected success.