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According to SBA, as many as 50% of the businesses in the U.S. fail within the first five years of their operation.
When it comes to startups, about 80% are able to survive the first year. With all these odds stacked up against them right from the beginning, many people give up on their dream of being a tech entrepreneur.
But, why do these tech startups fail?
Is there anything that can be done to avoid getting into this situation?
There are some common mistakes that many entrepreneurs make which lead to their early departure from the business world. However, with the right strategies and plans from the get-go, these mistakes can be mitigated, and your tech startup can stay and flourish in the industry.
Here is how to plan ahead and avoid common tech startup mistakes that make tech startups go out of business.
Find the Right Investors
Securing capital from investors is one of the earliest and the most crucial steps of starting a tech business. If not done right, it can also lead to some of the most difficult issues to bounce back from. It is very important to find an investor who shares the same vision as you do; otherwise, it can lead to mission drift, which translates to the risk of failing. It is important to do your research about your potential investors.
With the right investor by your side, you will be able to take advantage of the many opportunities that are out there waiting to be explored. Think about the relationship you will have with your investor by analyzing how they treated you during the fundraising process and how they addressed any issues or concerns. This will indicate the kind of relationship you can expect from them down the lane.
If your investor has also invested in other such startups, contacting these people and asking them about their experience with the investor is also a good idea. Ask them about all the reservations and questions that you have in mind, and you will be able to make an informed decision.
Create Your Financial Plan from the Get-Go
Creating a financial plan is the most important part of any business planning. You need to be sure about how much financial help you need, how much money is coming in and going out and how much you need to break even. You should also be aware of how much you will be paying your team as their salary and the other expenses you expect to incur down the lane. One doesn’t have to be a financial wizard to know all this. As a tech entrepreneur, you should be aware of these financial matters so that you know how much further investment you may need.
Lack of financial planning is one of the most common mistakes that are made by tech entrepreneurs. If you wish to make your tech startup successful, you must consider all your financial needs beforehand and make plans for them accordingly.
Hire the Right Team
Another common mistake that leads to the downfall of many tech startups is not hiring the right team. Hiring the wrong people in your business can seriously jeopardize your efforts. Since you are starting a tech business, you need to make sure that the people you hire have the right tech knowledge and experience. In addition to this, they must also have the right personality to fit into the team and your business environment. It is important to have people who can work on the things you are weak at. This will help you create a well-balanced team that works together to achieve common goals for your business.
Tell Them Your Story
If you think that you just need to create tech products, offer services and let the quality speak for itself, you are gravely mistaken. We are living in a world where there is an overload of information. You need totell your customers why they should prefer your products or services to the competitors. All of this will not be possible unless you tell them your story and convey to them the advantages of choosing your business.
A great way to share your story and build a rapport with your audience is to create a blog on your business website. If you don’t have the time to create blogs, you can always get help from blog writing services that have the experience and expertise in this field. The right blogs on your business websitewill let your customers know about your business and will help with your SEO efforts, which translates to better ranks and improved bottom line.
Give Digital Marketing Its Due Attention
The world has gone digital. If you wish to bring your tech startup to the attention of the world, you need to invest your time and efforts in digital marketing. It begins from your website creation and is an on-going process. You need to find the right digital mediums to communicate with your target audience. Work on your social media channels and communicate with your prospective customers. Chalk out a plan for email marketing to generate leads and then work on converting them to your customers.
Not investing your efforts in digital marketing when you are a tech startup is the biggest mistake you will make in your marketing efforts. This can lead to the failure of your startup as you won’t be able to convey your message across to your target audience.
Tech startups are bound to fail if they don’t follow the above-mentioned tips. It is important to learn from the mistakes and experiences of others and build your business while avoiding common mistakes.
As a Sr. Editor at a content writing service, Mathew and his team at Content Development Pros have helped small and large businesses get results through content. Look no further if you’re looking for copy that stands out, makes an impact, and converts. They’ll help you achieve your marketing goals through creative, well-researched content that follows the best SEO practices. Get in touch today!