9 Things an Entrepreneur Does That Can Destroy a Startup

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Sylvia Dion, founder of PrietoDion Consulting Partners, LLC recalls how she believed she could manage everything by herself when she had just started her company. Right from new client prospection and writing proposals to billing and providing tax services to the clients, she took the responsibility of every task on her own. However, it was only later she realized that wearing too many hats was not doing her any good.

Dion is just one among the many startup founders who made mistakes in the initial stages of running their businesses. But, they learnt from their mistakes and worked upon them. However, not every newbie entrepreneur is that lucky and certain mistakes cannot be fixed. Instead, they may end up causing permanent damage.

Launching a startup can be extremely challenging. Moreover, a lack of prior experience in the business world causes several startups to endure the misfortune of failure. According to recent research, 75% of startups fail. This research is based on a study of 2,000 startups that received VC funding from 2004 to 2010.

If you want to save your business and yourself from a disaster, here are nine fatal flaws you should avoid at all costs.

#1 – Not Doing Substantial Research

You may have a dozen brilliant ideas. However, only execution can turn a great idea into a great business and one of the fundamental stages of execution is market research. Without that, your business may end even before it starts.

Skipping research or ignoring the results from it can affect your startup in the long term. Research can help you find out what your customers truly need and how you can deliver it to them in the most optimal way.

Not paying heed to it may lead to blunders such as underestimating or overestimating costs, appealing to the wrong target demographic, misinterpreting your market or poorly gauging the demand. So, make sure to do your homework.

#2 – Skimping on the Business Plan

When you’re just starting your business, having a well-thought-out business plan in place is crucial and can help you achieve your business goals.

A business plan can guide you in the right direction and is an essential step in laying the groundwork for future success. Most importantly, it can provide you with answers to several essential questions such as:

  • What is the purpose of the company?
  • Who are the potential customers?
  • What are the mission and values?
  • What resources will be required?
  • How much investment is needed?
  • What are the long-term goals of the company?
  • What’s the desired direction for the company?
  • Who are the company’s major competitors?
  • How can the company measure success?

#3 – Handling Finance Inappropriately

When it comes to startups, handling money wisely is crucial. For this, it is essential that you ensure not to blow out a lot of cash by spending on unnecessary expenses.

Don’t hesitate to spend on administration efficiency. Doing so will help you focus your efforts on other important tasks. Make sure to make the best use of your startup’s finance. Only then will your business experience a smooth sailing.

#4 – Not Having a Backup Plan

Are you familiar with the fact that Nokia was established originally as a paper mill and also made rubber boots once? But, today it’s a telecommunication company. It made the right decision at the right time by adapting to the shifts in the markets and the technologies.

Remember, you may have to deal with arduous and tricky situations when starting out. In tough times like these, it is important for you to have a backup plan for worst case scenarios. Also, you need to be flexible and open to making the necessary changes if the original proposal doesn’t work out.

It’s easy to get wrapped up in your big business idea. However, you may have to modify your ideas as the market conditions evolve. Having goals and a clear vision are essential. But, keeping an open mind and being agile are even more crucial to growing your company. Doing so will help you build a viable business.

Moreover, changing course doesn’t imply that you are moving in the wrong direction. Sometimes, it may just be a matter of grabbing the right opportunity, which may not have been apparent previously.

#5 – Launching at the Wrong Time

Launching a startup at the right time plays a crucial role in setting things on the correct course from the beginning. Launching too early or waiting too long can lead to undesired consequences.

If your product or service is not ready to be marketed, then rushing to launch your startup will only lead to failure. Moreover, it may ruin your reputation completely.

Procrastination, on the other hand, may exhaust your resources and even lead your competitor to launch the product before you. So, make sure that everything is ready to roll, set the deadlines, and launch your company at the right time.

#6 – Not Taking Care of the Hiring Process

At a startup, employees need to take care of a lot of important aspects and juggle a plethora of tasks at once. Moreover, as you’re small and agile, there is significant scope for innovation and growth.

You want to hire those who understand your vision, lest your time and money should go down the drain. You cannot afford to waste them as they play a mammoth role at a startup.

Of course, you don’t want to drain your enterprise financially. It is, therefore, important that you don’t start the hiring process too quickly. That can, perhaps, be a brutal mistake. Not only will it increase your costs but also require you to part with your valuable time when it actually may not be needed.

#7 – Being Pulled in Too Many Directions

Mark Zuckerberg made sure to implement Sean Parker’s advice of moving to California and changing his project’s name from Thefacebook to just Facebook. This worked great for him.

Feedback from third-party sources can be greatly helpful. However, too much of it can be detrimental. You may be surrounded by several people who may constantly keep giving you suggestions and feedbacks about your business. This may make you want to tweak things immediately. But, you need to stay focused on your goals and act accordingly instead of being swayed by what others say.

You may have innumerable decisions to make. Don’t let negative feedback distract you or get in the way of implementing your business plan. You need to have a clear idea about your product, target audience, and strategy right from day one. So, follow the rule of thumb: focus and prioritize.

#8 – Poor Decision-Making

Yes, you have just started out and you may want to ensure that everything is perfect. But, that doesn’t mean you dwell on things and over-optimize every single decision. That will only lead to wastage of time and make it difficult for you to move ahead or take the right step.

If you strongly believe in an idea or a strategy, make the call and manage the risks as you move forward.

#9 – Being Too Passionate

According to a Wall Street Journal article, being too passionate about your idea can cloud your judgement, lead you to make bad choices and eventually destroy your startup.

Having excessively strong feelings about your startup can leave you blindsided, thereby leading you to make poor decisions. This can ultimately doom even the most promising startup.

It is essential to acquire the necessary skills and garner the much-needed support required to run a startup. More importantly, you should find effective ways to consider your ideas with a grain of salt and temper the rosy view with a dose of practicality. As Steve Jobs said, “Follow your heart, but check it with your head.”


Over 600,000 companies go out of business every year in the U.S. alone. Infant entrepreneur mortality is a humongous problem. You don’t want to be a failure story. But, remember, launching a new company is a risky endeavor. One seemingly harmless error on your part could mark the death of your startup. So, make sure to take care of the minute details. Committing any of the above-mentioned mistakes can harm your business in the long run, and perhaps, even destroy it totally. From handling finances inappropriately to hiring the wrong employees, these mistakes can prove deadly for your startup. Ensure to avoid these game-ending mistakes at all costs and you will be able to run your startup successfully.

Pratik Dholakiya is the Editor of Startup Gear. Feel free to reach out to him in case of any questions or if you want to contribute on StartupGear.org.
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