Thanks to the convenience brought about by technology development in this digital age, starting up a business has never been this easy. Gone are the days when one had to have a hefty amount of cash to start a business. Even with a small amount, you can establish a startup company and watch it bloom.As such, there are lots of millennial entrepreneurs who are engaged in startup businesses. They all want to become successful entrepreneurs in their young age.
However, just because it is more convenient and easier to start a business now than before does not mean that you should venture into business without a well laid plan. This is one of the reasons why most millennial entrepreneurs fail, being forced to close shop just a few months after commencing their operations. How can we prevent this from happening? In this post, we give you a list of four mistakes you should watch out for if you want to save your startup business.
“Timing, perseverance, and ten years of trying will eventually make you look like an overnight success.” ― Biz Stone
Poor Financial and Cash Flow Management
The amount of cash moving in and out of a startup needs to be managed extremely well, especially early on. According to the Association of Chartered Certified Accountants, 82 percent of businesses fail due to failure to pay attention to cash flow. Unfortunately, a lot of millennials are not financially savvy, making cash flow management a significant problem for a millennial-run business.
To avoid this mistake, you should pay more attention to how your cash flows in and out of your business. If you cannot do it properly—probably because you are not used to the technicalities used in accounting—hire a dedicated accountant to record your company’s expenses. It is important that you track everything as it will give you a general knowledge of how your company is doing. You will also be able to determine your profit margins and costs when you do this.
Fundraising too much, and too soon
Fundraising is important as it is the main source of startup capital. Although you may have saved some capital for this, it is not always enough. Most entrepreneurs result to crowdfunding to find investors who are willing to invest their money in the startup.While this is an important aspect in establishing a business, focusing too much on fundraising may backfire on you.
What you should do is allot a specific time for crowdsourcing so that your energy and focus are not preoccupied with this all the time. Remember that there are other important tasks that needed your attention. One of them is formulating your marketing plan to promote your products or services. Keep in mind that if you have the correct business planning strategy, income generation is guaranteed. There is no need for constan fundraising because your company will be able to stand in its own.
Trying to Control Everything
It might seem natural to try to control everything that happens in your small startup since you know your business inside out. However, this strategy could be detrimental to your startup.
It is your job to oversee everything that takes place in your company, but you need to hire a dedicated and trustworthy team to delegate some of your tasks to. You cannot do it all alone—sooner or later, you will burn out. If you are starting out and you still don’t have enough funds to employ people, seek help from your family members as they can genuinely help you in managing your business.
Spending in Wrong Places
It is natural for millennial entrepreneurs to become idealistic and ambitious. They all want their products and services to be state-of-the-art. As such, they tend to spend huge amounts of money at the beginning just to give the best to our customers. However, you may want to go slow on your spending as overspending may lead to your downfall. Instead, focus on improving your marketing plan. Remember that money is a limited resource, so you should spend it wisely.