Content provided by a guest contributor.
About 75 percent of start-ups and 90 percent of tech start-ups are doomed to fail. Too many wonderful ideas never make it past the initial stage, and many that do lose momentum and die an untimely, soon-forgotten death. Avoid these common mistakes and don’t be a statistic.
Having too wide a target market
The idea might seem good at first – having as many people in your target market as possible will mean more potential clients and customers. Wrong. This is one of the biggest marketing mistakes you can make. If you target everyone, you end up targeting no one. You’ll waste a lot of time and money in your marketing campaign and investors won’t take you seriously.
Not having a business model
A business model is the heart of your business strategy and explicates exactly how you’re going to create, deliver, and capture value. True, being creative is an integral aspect of an entrepreneurial venture, and there is a strong link between creativity and entrepreneurship. But in business one must be practical as well. Even if your product is the most original and useful new idea to hit the market, without a proper business model your fledgling start-up will wither and die.
Thinking the product will sell itself
No matter how great your offering is, if you aren’t making sales you’re not going to get anywhere. Products generally don’t just sell themselves. If sales aren’t your strong suit, then maybe you should find a partner who is sales driven.
Every aspect of your product needs to be well-tested in advance. From the packaging to the price. Don’t just assume you understand what your audience will want. Do vigorous research. On that note – don’t rely on the opinions of your friends and relatives. Of course they’re going to like everything about the product. You need well-informed and brutally honest advice.
This is one of the worst mistakes you can make. You can have everything else in place, but that counts for nothing if your start-up isn’t properly managed. If you don’t personally have management experience, don’t think you can do it on your own. Either complete a business management course or get someone on board with proven experience. Remember that being a manager requires more than being an expert in a field or having a lot of knowledge. Management requires a specific set of skills to be effective.
Diversifying too early
Don’t get greedy and be in a rush to diversify. Stay focused on your core products until you’ve established a strong customer base. No matter how tempting the opportunity to branch out, stick to what you know. Once you have a strong foundation you can build on that.
Article brought to you by Boston College’s diploma in business management.