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Entrepreneurs are notoriously accepting of risk. They have to be, or else they could not take the plunge to start their own business. Unfortunately, new businesses can and do fail — and a good work ethic isn’t enough to save them. Those who believe their entrepreneurial spirit will spare them are sadly misguided.
Of course, hard work does pay off. The question is: what type of hard work are you doing?
Ninety per cent of startups fail, no matter how hard their founders worked. To avoid becoming a statistic, you must know the pitfalls — so your company can land in the top 10 per cent.
Reason #1: Low Cash Flow
As the saying goes, you must spend money to make money. But that only lasts so long. Once you get to a point where you’re spending tons of money to promote your business without achieving profitability, you’re set up for failure. So many new entrepreneurs make this mistake. They assume they need to pump money into product development, marketing and advertising, and staffing — before they have enough cash flowing in to justify these expenses.
To avoid death by low cash flow, launch with your MVP (Minimum Viable Product) and avoid paid media or fancy software until you’re fairly flush with cash. Word-of-mouth advertising, inbound…
