- April 17, 2018
- Posted by: Koyona Duke
- Category: Development, Entrepreneural Development, Entrepreneurial Development, Learning, services
There are thousands of startups in Nigeria alone, as we know small businesses drive the economy so when you decide to start up your business, it may either seem really easy after all your neighbour did it or it may seem like a major step and cause fear to cripple you.
Yes starting a new business IS a big deal and care needs to be taken, but here are a few mistakes that if avoided could help you get closer to actualizing that dream and solving that problem;
- Getting hung up on the business plan: I cannot begin to count the number of people who have approached me for business plans. While this is one of the ways GrowCo makes money, I like to first ask what the client needs the business plan for. If it’s not for a loan (because banks love their long verbose documents, or a grant (because they also love long verbose documents) all you really need is knowing the answers to a few important questions to help you make better decisions. The thing about a business plan is it needs to be flexible and change as you grow. A 300-page analytics document will be difficult to change. Download our free Business Planning Temple here. A simple document that lets you have a clear picture of your vision as well as fix possible errors in your plan is what you will be needing at this stage.
- Being rigid about your idea: As a startup, you cannot afford to be hung up on the idea in its original form. You need to understand that ideas evolve and change as time goes on. Many Examples exist to prove this point; Linda Ikeji blog began as a blog to curate news from around Nigeria but has now evolved into a major media source for Nigerian News and entertainment. Amazon began as an online bookstore but based on the need they saw in the market grew to become a major seller in the online space. Easy Shoppers makers of Easy Bread in Abuja began as a small shop to serve the needs of their immediate neighbourhood but grew to become one of the bestselling bread makers in Abuja and having food outlets around town. This teaches us that the challenges you set out to solve as a startup could evolve and open up so there is a high cost to being rigid.
- Not Asking for Help: When you are starting up, a major mistake you can make is thinking you will be able to do this on your own. You will need help from many places and from many people and this help is available through mentorship programs, buddy systems and groups and communities that are available for you to join.
- Making untested assumptions about your business: As a startup, you will assume that a need is available for your product or service and the worst thing you could do is move on blindly into the market without seeking to validate these assumptions. Read our previous post on Validating your Idea.
5. Lacking Focus: I can categorically tell you that nothing will waste your time or derail you more than a lack of focus in your business. If you do not take out the time to think about your customers or business or market or try to focus on everyone and solving every need, you will end up moving around in circles and losing your business in the end. Your lack of focus may exist in the solutions you provide or the product you offer.
6. Hiring for Hiring Sake: Imagine this scenario; Rachel Started a sewing business and she needed a social media person. Instead of using the list of experts that were available she hires an intern who cost her much less. She ended up spending hours and hours doing what she was avoiding by teaching her intern how to use the various social media platforms she was on, as opposed to using a professional who may have cost her more in money but balance out in value. Hours spent on teaching someone who may or may not be suited to a job are hours you could spend on your core service.
7. Confirmations Bias: Confirmation bias is when a person does something at all costs to prove that the decision they have made is the right one as opposed to accepting that the decision is wrong. Many startups fall into this trap especially when testing a product. Because we get so hung up on what we want it to be, we spend resources and time proving that instead of accepting that an idea, a product or a move may be bad or not worth it and move into other things
8. Underestimating the Financial requirement: While you may not know for certain the full extent of all the expenditure you will have, that’s what planning is for, While you shouldn’t get bogged down by the planning stage, you should not speed through it so fast that you do not get all the expenses and financial obligations you will rack up . As much as possible you should know in order not to run out of cash before you start making money
9. Spending too much time and resources on product development: these ties back to our previous point on making untested assumptions. When you spend a lot of resources and cannot sell a product then that’s money you can’t get back. You need to make sure that before you sink money into developing a state of the art product, that there is A) a need for it B) a way to reach the people with a need C) that you know the exact people with that need D) that they will pay for it
10. Starting up alone or starting up with too many partners: A well-picked co-founder will drive you and keep you grounded. Working alone will leave you overwhelmed. Too many co-founders may derail you. Be wise when making these decisions.
Bonus Point: Do not forget that you are out to solve a problem and hopefully change the world for something you care about. Always seek to learn and evolve. Don’t hold on too tight to a failing idea and Good luck on your journey.