The problem with learning from your own mistakes lies in the fact that this experience may come at a too great of a price. A failed enterprise may indebt you for years to come, as well as provide you with a bad reputation, which can seriously cripple your future entrepreneurial prospects. Luckily, in the age of free information, you have the privilege to learn from mistakes of others. With this in mind, here are 5 overlooked startup tips, which, when ignored, can turn out to be extremely dangerous.
1. Don’t be reluctant to fire non-productive employees
While it is true that a lot of people need some time to get into the game, according to the economics of productivity, competence grows linearly while incompetence grows exponentially. According to one estimate, the square root of the total number of your employees does approximately half of all work around the office. When you have only nine employees and three of them do half the work, this might become a problem. On the other hand, managing to recognize the non-productive members of your staff and replacing them might result in a significant productivity boost.
2. Know where your product fits into your niche
One of the things that startup owners could learn from book authors is the importance of knowing where your product fits into your niche. For instance, when an author is negotiating with a publisher, one of the first things they need to say is where their book will be placed in the bookstore. In other words, what shelf will it be placed on, next to what author? Needless to say, in order to get the most out of your marketing, you need to have answers to questions similar to these.
3. Cash is a huge issue
A commitment of getting paid or even a credit payment deposited to your account every month is great, yet, it sometimes isn’t enough. In order to keep your company afloat, you need to maintain a healthy cash flow. With this in mind, there are three methods to achieve this goal. First, you might want to insist on getting paid upfront. Still, some fear that this business policy may drive some people away. Second, you need to be persistent when dealing with your debtors in order to get your money back. Finally, if the situation demands it, you might want to consider selling your invoices to a factoring company.
4. Security is paramount
When calculating their losses, most startups fail to consider losses that are a result of theft. How could they? After all, isn’t this something completely unpredictable? Well, both yes and no. You see, a company that invests little to no funds in their security may find that these cases of burglary, cyber-attacks and in-house theft happen quite often. Because of this, a quality IT security infrastructure and surveillance system are paramount. In order to ensure your B2C interactions run smoothly, you might want to consider a security access control software.
5. Don’t fraternize with your staff
Finally, this thing is easier said than done in a startup or an SMB (small and midsize business). Sure, it’s easy for a CEO of a multi-million-dollar company to adhere to this rule than to a person who has four people in their employ. Nonetheless, fraternizing leads to favoritism or at least allegations of favoritism that can bring ruin to a unity of your startup. Moreover, romance in the workplace may be a common occurrence but it is also a hazardous practice in 2018. Needless to say, it is probably better not to take any chances.
At the end of the day, each of these tips is there as a more of a safety net than a recipe for success. This is due to the fact that ignoring any of them can cause your business to suffer or even completely fail. On the other hand, by getting the hang of some of these tips, you might provide your business with a much safer growth and a scalability that is easier to control. The choice is all yours.