The Top 5 Reasons a Start Up Company Won’t Take Off

As we have mentioned in the past, there’s nothing more exhilarating than successfully beginning and running a start up company. Many try while only a few succeed. Identify and avoid this handful of reasons a start up company might go belly up.

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Growing with Demand

A start up company struggling to grow with demand is a good problem to have. It means that your company is keeping busy and can’t keep up with a number of customers you currently have.

“Too much” growth can be great because you obviously aren’t hurting for prospects. However, it can hurt you if you fail to get your operations up to speed quickly. If you lag too far behind, this will negatively affect your new start up. There are a few measures you can take to help you with this issue.

First, make sure your business plan has business growth taken into consideration. Have your strategy laid out beforehand, so you know exactly what to do when customers start pouring in.

Also, watch trends and see if any surges in demand are imminent. If you have a pool installing business, you can bank on more spring and summer clients calling in.

Finding new customers

Not having customers your start up company desperately needs is not a good problem to have. You can’t just start up in some industrial park and expect people to know who you are. You need to get your product or service in people’s faces.

If you didn’t start up with a sound marketing plan, start now. Time spent marketing smartly will pay you back. Get on social media and have friends on those networks help you spread your message. Social media can be a great source of free advertising in this way.

Alternatively, several social networks have options for paid advertising. Create your ad, set a budget and launch your campaign. Paid advertising goes beyond what your network of friends might be able to accomplish, for not a lot of money.

Too Much Capital Too Early

A common mistake that can strike any start up company is getting too big of an investment early on. It’s convenient to have a substantial bankroll to get things moving, but more times than not, it leads to some poor decisions.

Not only do you give up decision-making power when you have more investments in your company, it puts pressure on you and your business to perform. If you can start with a lean model requiring less investment you’re forced to make smart moves.

Building a Cohesive Team

Finding employees isn’t that difficult. Finding good employees that enjoy working together is an entirely different beast. You can have the best person for the job in each department, but if each department can’t stand each other the machine of business will grind to a halt.

It’s much more valuable for a start up company to have a great team, not just exemplary lone wolves. It’s also important to find people that can grow into and understand your company. Hold on to people that ‘get’ your start up company and work well with others.

Receiving Payment

Keeping your cashflow positive sounds like a no-brainer. But, a common pitfall for businesses is to concentrate more on getting new customers. Accounting just isn’t as fun.

It’s paramount to your companies survival that you stay on top of your invoicing. Having negative cash flow will sink your business very quickly. Getting hands-off with your accounting is a great way to make sure you’re staying ahead. There are great, affordable accounting solutions available. This will allow you to focus on the more taxing parts of your company; not having to wear the accountant hat as well.

Watch out for these common mistakes and know how to deal with them and your start up company will be that much more prepared!

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