There is no rulebook for entrepreneurs, but it is important to follow a few basic guidelines to help your startup turn into a success, writes Silicon Canals. After raising the seed capital, the founders of the startup should focus on how to use this new injection efficiently. This decides if the business will survive or not in the long run.
That’s not all! Even when the startup is in operation, it is easy to fall into a trap by venturing into tasks that might sound profitable, but don’t generate any money. No entrepreneur is immune to this trap as it is a part of the success story of the business. If it works out, then the business will become more successful.
Basically, the path to success is prone to facing the odds of survival and depends on how fast the business can get to generating revenue. As an aspiring entrepreneur, it is important to seek the way to generate revenue. If you are aspiring to become successful, then you will find the below guide useful as it will help you sidestep pitfalls leading to failure.
#1 Hurrying up with raising funds
In the current competitive business arena, you should debut a startup only if there is an extraordinary idea. You shouldn’t do the ordinary to thrive in the business ecosystem. And, to do the extraordinary, you will need a massive capital. However, it does not happen overnight, but long and boring stages that might scare you. Remember that overnight success is not right but a trap.
Raising money does not guarantee revenue. Before you raise money, you need to know what you need to build to generate revenue. And, you should put the funding to use in an effective way. Instead of generating a few million to run your company, you should break the business into small segments and raise just the right amount needed to generate revenue.
Figure out how you will get the revenue and then build what is needed for the same. You can pitch the same idea by repeating the process over and over as and when required. When you do so, investors will also get to know that the funding will generate profit and will be ready to invest in your business.
#2 Building the company first
As an entrepreneur, you will focus a lot on building the company before generating revenue. However, you should not focus on some aspects such as having a website, mission statement, logo, social media presence, financial plan, office space, merchandise, a board of directors, management team and advisory board before generating revenue.
It does not mean that you should not focus on these aspects of the business. How the initial revenue comes will not drastically alter these aspects or their true purpose. One example of this trap is creating a web app and realising that customers who use the paid version are not easily accessible.
#3 Hiring a team before forming an idea
It is essential to work on the strategy and idea of the company before forming a team. If not, you will end up having many people fighting over the strategy without having any revenue generated. It is easier to build the business with other people involved. Remember than when many people are involved, there will be agreements to sort out, differences in priorities, decisions to make, and more. In the early days of the startup, it will be a headache.
#4 Mapping the product’s infrastructure before its release
If you are building a rocket, then you need something to launch it without exploding. But its reusability, colour, how it lands, etc. do not matter. This is a pitfall as most entrepreneurs fall into this trap. To sidestep this trap, you should set priorities and take up one feature at a time as you get funds.
#5 Focusing on innovation initially
Any startup, which misses out on innovation is a small business. But it should not be focused on before execution. You might be constantly worrying about innovation before you build the product and this is a trap. So, you should innovate only after building the product.
#6 Eyeing for a huge userbase
It is not uncommon for businesses to eye for a huge userbase. The trap is that you will be trying to sell your products to millions of customers at once as it is a good way to generate revenue quickly. However, it is an expensive affair and might turn into a major pitfall. You should start with a few customers and get more of them onboard. You will get to learn a lot from the first few customers and you can implement these to generate more revenue from the others.