Guide: How To Launch A Startup That Will Fail

50% of UK startups fail within their first 5 years. That’s a massive amount when you consider that over 600,000 limited companies were formed in the UK from March 2016 to March 2017. That doesn’t even include sole traders, a business model that’s pretty much as popular as the limited company model.

Scary reading if you’re planning to register a company and turn that long-sought-after dream into a reality.

But if you’re the headstrong type who laughs in the face of statistics and sees the 50-50 chance of it all going pear-shaped as a challenge, you’ll find the following very helpful. Or not.

Here’s how to launch a startup that will fail.

#1 Go Into Business For All The Wrong Reasons

What is it that drives you? Crafting a successful product and business, or getting rich quick? If it’s the latter, your business is in trouble.

In reality, as an entrepreneur, you will work longer hours for less money. Passion for what you do is key to building a successful startup. If you start a company for the sole purpose of making money, you will be more likely to succumb to burnout. Chances are, you’ll also lose interest when your business isn’t an overnight success.

Being an entrepreneur shouldn’t be a status symbol. Your priority should be nurturing an idea and ensuring that your product and business model fit the market as perfectly as possible. This will naturally drive growth and lead to you making money.

#2 Ignore Your limits

When starting a company, you should focus on an area that you’re familiar with through previous professional experience. You may be skilled when it comes to the core of your operation, but what about the areas where you’re not clued up?

Failing to recognise gaps in your own knowledge is a surefire way to ensure failure. This is especially the case with accounting and legal concerns. Entrepreneurs often attempt to take these matters into their own hands to save money. You could end up making costly errors, wasting time and money when it would have been better to outsource from the start.

Whilst outsourcing may not be immediately possible, identifying areas where you need assistance can guide your business roadmap. When your budget allows it, you can then delegate tasks which are being done inefficiently due to inexperience.

And remember, it’s not just about your own limits. If you’re going into business with a partner, you need to be aware of their skillset. Even if they’re bringing complementary skills to the table, you must still identify the weaknesses in your combined skillsets. Otherwise, your startup can suffer from losing time and focus on processes that should have been outsourced.

#3 Panic When It Doesn’t Go To Plan

Don’t deviate from your business plan too early. You may read about overnight success stories but the reality is, building a successful business takes time. There are scenarios when being able to pivot is a positive but not in the early days of the business.

Diversifying your revenue streams should be done in a proactive manner, rather than as a reaction to your initial plan not going as smoothly as anticipated. Understanding the length of a sale is difficult to know when starting a company and can cause strain on your cash flow. By increasing your number of products, you’re exposing yourself to significantly more risk in this regard than necessary.

#4 Go BIG

Ambition is an absolute must. However, is it possible that you’re being too ambitious too quick?

Do you need to rent a large office space? Is there really a market demand for that side product yet? Is a five-man IT team necessary?

One of the biggest traps that startups fall into is spending too much money on areas that don’t directly impact on product and sales.

#5 Ignore Company Culture

Building a team of talented, invested individuals won’t be easy (and probably not cheap). Once you have the right team in place, you should do everything in your power to keep them.

This is where company culture comes in.

Team members should feel appreciated and be justly rewarded. If your team know that they are valued, they will stick around. They’ll also become champions for your business, helping you recruit and retain new team members.

Introducing various perks and benefits is a fantastic way to nurture a positive company culture, but it needs to go deeper than this. You must be transparent in terms of your company’s performance and long-term goals as well.

Failure to do this will result in you losing valuable team members, cash (as you seek to replace them), and time (as you train up new team members).

#6 Be A Perfectionist

Wanting to release the perfect product or service is totally understandable, but also a massive waste of precious time.

Refusing to launch anything until you’re totally satisfied is futile as there are certain lessons that can only be learned as a result of releasing your product to the market. Don’t hold back on something and refusing to launch until you’re 100% happy. Craft a minimal viable product that satisfies the user needs identified in your research phase.

#7 Forget About A Long-Term Business Model

Do you know how far you have to scale before your business becomes profitable? It may be tempting (and seem considerably easier) to put something out there and see what happens but this haphazard methodology is bound to end in failure. Understanding your long-term business model is vital in guiding your spending tolerance and acquisition strategy.

Long-term planning is essential. You simply must know when it’s appropriate to scale and when to hold back as it could be the difference between boom and bust.

#8 Have No Faith In Your Product

You and your business are going to hit roadblocks along the way. How you deal with these low points will have a massive bearing on the success of your business.

Being ready to throw in the towel at the first sign of trouble does not bode well for your business or your future as an entrepreneur.

When problems do arise, and they will look back at day one. Why did you start up? Why are you the best person for this job? What has happened to change this?

If you are ready to slug it out, trust your data. Implement a data-driven decision-making approach to your business – this will help guide your growth and help you identify areas where you can improve.

#9 Make A Product Not A Business

Are you providing a product or have you created a business? A product brings in revenue once. A business satisfies customer needs indefinitely.

Successful startups understand this distinction. They are able to affect customer lifestyles and bring in recurring revenue over a long period.

#10 Be The Facebook Of The [Insert Your Industry Here] Industry

Is there really an appetite for what you’re looking to provide? It’s easy to think that you know your industry inside out. But do you really?

Understanding the scale of your venture from the beginning will prevent you from making early and costly mistakes. If you’re being wholly unrealistic with what you’re setting out to achieve, what happens when it inevitably doesn’t go to plan? Is it viable to launch your company on a national scale or would it be more beneficial to focus on the local level to begin with instead?

Create a viable product and expose it to the market before you think about scaling.

 

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