Having a startup is not easy. Some startups thrive and become giants, while others unfortunately end up closing the doors shortly after they have begun.
With that in mind, and to help entrepreneurs avoid some common slip-ups when starting a business, Europartner listed the top 5 mistakes of startups in Brazil:
Ignore competition
Competition exists anywhere, and it is not because you had an innovative idea that another person may not have had the same idea. In reality, there is a remote possibility that other companies will not compete directly with your products or services.
To avoid this type of error -that is very common in startups- even if the competition is indirect, one idea is to identify the strategies adopted and to evaluate how other players are operating in the market.
Bet on several investors
It’s no use going out looking for a large number of investors at the same time, hoping someone will be interested in your startup. Finding the ideal investor is like starting a dating: you can not send letters to several people asking if they want to date you.
There are several types of investments, each one has a different focus, being more or less compatible with your business, depending on the market, in which phase the startup is, finally, a series of factors.
Choosing an investor who has no affinity with your type of business can show a degree of amateurism.
Choose an angel investor based only on financial resources
The angel investor’s choice should not be based solely on the money that he has available to invest in the idea.
It is interesting to observe what other virtues are desirable in an angel investor, such as: executive knowledge, market knowledge and a good networking.
Choose carefully, see what the investor can add and if he can be your mentor.
Not validate the business
Do not seek acceptance of your product or solution that will be offered before investing money on something you do not know if it is feasible is a very big risk.
It is very common to see people developing applications without first interviewing several people and checking whether there is a real need to have that app.
Do not plan expenses
This is a crucial part of a company’s survival, and unfortunately it is much neglected by many startups.
Failure to properly plan spending can lead to the development of strategies that are simply unsustainable in the medium and long term. Launching promotions and charging a value below the product really costs are some of these mistakes. In this way, the company is in deficit and can not grow in a sustainable way.
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