Having a startup is great, but maintaining and ensuring accountability requires a lot of work and great discipline. Therefore, specific structures must be implemented strategically. Most startups are enthusiastic at first, but can’t stand the test of time to keep up. However, for the organized efforts and activities of those who run a particular enterprise, ensuring their survival is crucial.
In Africa, statistics show that most start-ups may not prosper for more than three years. We all make mistakes, but in the process of building a business, making mistakes may cost more than you think. For various reasons, we often do too much or not enough, depending on the way our business grows. To be honest, trying to build a successful new business is a tough job. Sometimes you forget very important things, or over time, you may start to lose focus. When you don’t have the charm you want, working hard every day requires a lot of discipline. When things start to be useful for your business, you also need to eliminate the distractions that seem to exist. Some mistakes are easy to correct. Other bugs take a lot of work to fully recover because they are destructive. That is why it is important to understand the mistakes that entrepreneurs often make. This valuable information will prevent you from falling into the same trap without facing multiple failures. It also prevents you from understanding the mistakes you made. You can take a step back and evaluate your business and its behavior to make sure you are doing it right. Since operating a business is a process of thinking and acting, we look forward to helping you analyze the business process you use. This will enable you to understand your business situation. Whether your business is going well, or you have a problem that needs to be resolved. In order to understand the state of your business, we provide you with the top 12 mistakes made by entrepreneurs that can make your business worse.
Running a Business without a Plan
Small businesses often overlook the importance of effective business planning before opening their doors to costumers. Neglecting to make a business plan is one of the most important obstacles to business success. Many new entrepreneurs in Africa have no business plans. These documents don’t need to be too lengthy or detailed, but taking the time to develop a business plan will help keep the work consistent, serve as a meeting point for the team, and provide milestones to measure their progress.
Failure to seek professional advice can make financial problems worse. Few new business owners can claim to have experience in all areas of their business. Hiring an accountant or financial advisor helps ensure that you obtain loans and manage funds profitably.
One of the main reasons for the failure of small businesses in Africa is a lack of capital or working capital. In most cases, business owners are well aware of how much money is needed to maintain day-to-day operations, including financing salaries; pay fixed and miscellaneous administrative expenses, such as rent and utilities; and ensure timely payment to external providers. However, bankrupt business owners know very little about the amount of income generated from the sale of products or services. This disconnect leads to a funding gap that can quickly bankrupt small businesses. The second reason is that business owners lose their brand when pricing products and services. In order to beat competitors in a highly saturated industry, companies can price products or services much lower than similar products to attract new customers. Although this strategy has been successful in some cases, the companies that ultimately shut down are those that have kept the prices of their products or services too low for too long. When production, marketing, and delivery costs exceed new sales revenue, small businesses have no choice but to shut down.
Business owners are often unable to prepare for the marketing needs of the business in terms of required capital, lead range, and accurate conversion rate predictions. When the company underestimates the total cost of the first marketing campaign, it can be difficult to obtain financing from other business units or to reschedule funds to fill the gap. Since marketing is a key aspect of any early-stage business, companies must ensure that they develop realistic budgets for current and future marketing needs. Similarly, making realistic predictions in terms of target audience range and sales conversion rate is critical to the success of marketing campaigns. Companies that don’t understand these aspects of a reasonable marketing strategy are more likely to fail than companies that take the time to create and implement profitable and successful marketing campaigns.
Not keeping records
Every business must keep detailed records to maintain normal and efficient operations. Quality case management ensures that any business can keep up with its growing customer base and adapt to change. In a successful business, change is inevitable over time and the business must be able to fluctuate. From current operations to accounting to human resources, poor document management can disrupt business relationships and slow down almost every aspect of the business. By tracking or adjusting progress, your business plan and financial forecast will be improved. Make it a dynamic document by continually monitoring your progress and updating your plans and forecasts.
Don’t learn from past mistakes.
Failure is obviously unpleasant, although it provides an opportunity to learn. However, companies rarely learn from failures. They generally do not take this opportunity to make corrections. When a company fails, there are usually several reasons. If business owners are not aware of their mistakes, they have no chance to learn from it. When you start a business, learn from your early mistakes and use them to guide your ultimate success. Remember, many successful entrepreneurs failed the first time, but after studying the problem and making improvements, they succeeded again.
Running out of funds
One of the main reasons why African startups have largely failed is because they ran out of cash. A key job for the CEO is to understand how much cash is left and whether this will lead the company to a milestone in successfully financing or achieving positive cash flow. The problem that often causes companies to run out of cash and not raise more funds is that management failed to achieve the next milestone before the cash ran out. In many cases, cash can still be raised, but the valuation will be significantly less.
Ignore the market demand
Another reason for the failure of start-ups is that they cannot identify and design products that meet the needs of the market, especially their customers. This may be due to a lack of market research, or it may be a more strategic issue, that is, the inability to get the right product to market. Most of the time, the first product that a start-up company puts on the market does not meet the needs of the market. At best, the product needs some modification to match. In the worst case, the product will fail and require a thorough review. If this happens, it is obvious that the team did not deliberately verify their ideas with clients before and during development.
Avoid the use of technology.
Africa’s rapid economic growth requires technological advancements to adapt to the technological world and meet the growing needs of customers. However, African startups will eventually use companies outside the continent to manage the technical aspects of their projects. Sometimes this leads to a successful product, but it can also lead to failure and exploitation, because outside companies are often more interested in making money than helping new companies grow.
Despite the imminent arrival of foreign investment, there is still much work to be done on building infrastructure in many African countries, not to mention improving access to capital and promoting favorable government policies. But traditional African cultural ideas face greater challenges. One of the biggest challenges young African entrepreneurs face is the value system in Africa. We are moving into the digital space and new economies, and most of these economies depend on trust.
Success is not alone. Give expectations. In most cases, these expectations seem to be correct, but their true meaning is not. The same concept applies to young beginnings. Startups often face challenges when they grow rapidly and then set “unrealistic expectations.” Remember, success is short-lived and expectations are endless. Is this where you need to start translating what you really expect? Sustainability is the name of the game. Sustainable development requires continuous efforts.
Recruit suitable candidates
The most important factor that defines the organizational culture of a startup is the synergy of the team. A team is made up of people with similar skills and the same methods. To develop a highly successful team culture, organizations in general, and startups in particular, must hire suitable candidates. There are many aspiring people available. Choosing a suitable candidate for the position is a particularly difficult task. This is one of the biggest challenges faced by startups in this digital age. When hiring suitable candidates, organizations must remember a golden rule: birds with the same feathers fly together.
In order to meet and overcome the challenges of the so-called violent business world, you must start with flexibility and focus on maintaining integrity in the face of adversity. The biggest challenge highlighted above must be solved in the beginning.