Are You Making These Common Mistakes in Your Start-up? A small yet very important factor for an entrepreneur is to pay careful attention to all legal compliances while starting or even terminating a venture
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In spite of being exciting, walking through the entrepreneurial terrain can be quite overwhelming. The whole journey is nothing less than a rocky road where one has no one but themselves to take the onus of every decision. Most people, as they head on to test the water with their business idea make a lot of mistakes in the journey. While the idea is to quickly learn, unlearn and grow, it's always intelligent to learn from the mistakes of others and avoid making the same ones.
In that light, Entrepreneur India spoke to Chetan Khaitan, the co-founder of Toolsvilla. His company is one of the largest portals countrywide that deals in machine tools and equipment. Toolsvilla solves the big procurement gap in its specialized niche in terms of both product availability and pricing.
Navigating the start-up with more than 5000 registered customers within only 2 years of operation, Khaitan has some nuggets dipped in gold for every aspiring entrepreneur. Some of his suggestions have been described below.
Not Understanding Customers & the Market
As a company making its way to the marketplace, one of its fundamental pillars should be to keep customer interest on the highest pedestal. Every step, starting from product design to the sales pitch must be focused on the customers' needs and pain points. Very often, entrepreneurs tend to divulge their attention to their own offering more than solving their customers' problem. However, the idea should be to keep the customer as the epicentre and evolve as and when needed. "When we started Toolsvilla, we had designed it like any other e-commerce website. However, after studying the customer behavior through heat map tools & feedbacks, we simplified the user interface (UI) of the website. Our customers were not very tech savvy and hence, the checkout process had to be customized to ease out the buying process", recalls Khaitan.
Responding as per customer needs is indeed pivotal in driving the success of a venture. It's also important to respond as per the market scenario driven by the demand-supply dynamics. Failing to do so results in poor strategy and compromised execution.
Trying Your Hand at Everything
It's important that one enters a market within a specific niche. Today's world is characterized by an extremely diverse offering, making market entry simple but capturing position difficult. Every business must identify their USP and strengths. Based on that, the founders must pick their niche, build on it and slowly scale up to other verticals.
Many young entrepreneurs, especially those who are equipped with a sizeable amount of funds have a tendency to spend on the extravagant side. While they might be able to afford it, it could put the company under a lot of pressure in the future that is to come. Khaitan suggests, "Starting small makes the start easy. One should make the most of the existing resources and avoid unnecessary expenses early on." In his opinion, operating lean helps companies take quicker decisions and reinvent faster.
Avoiding the Mathematics
Very often, entrepreneurs fall short of doing the math. In other words, they miss out on ascertaining beforehand the amount of resources they need in line of their end objectives. This makes the whole process go haywire, with a lengthened cycle time to generate meaningful results. "Entrepreneurs should have set goals and then calculate the amount of resource needed to achieve the goal. Mathematics is very important for the growth of any start-up", asserts Khaitan.
Entrepreneur India also sought views from a young serial entrepreneur Manish Agarwal. He's been involved in several verticals ranging from manufacturing of textiles to FMCG distribution to industrial trading. In his latest venture SuperGroups, he serves as a co-founder. SuperGroups is an app designed to help groups be productive and spam free, unlike regular messaging apps which focus on just the chat feature. Agarwal too has some insightful suggestions to share on common mistakes to be avoided when one is starting up.
Not Having Like-minded Co-founders
Co-founders play a decisive role in the success of a start-up. It's important to make sure they're serious and invested. In Manish's experience, many co-founders, after committing their participation had backed out. This wasted a lot of the funds and effort he had put in himself. "They hadn't invested their time or money in the business. They had no skin in the game and hence, it was easy for them", recalls Agarwal.
Delaying the Launch of Your MVP
Businesses often delay in creating a prototype of their offering with the view of creating the ideal one. This approach of targeting perfection is potentially a route that makes them waste both resources and time. Manish says, " When starting out, make an MVP which is useful to your customer as soon as possible. Even if the product lacks some level of visual appeal in the beginning, if you are addressing the customer's pain point, the customer will use the product. You will get an opportunity to iterate the product continuously through customer feedback and this will save you wasted effort and time."
Not Taking Compliances Seriously
A small yet very important factor for an entrepreneur is to pay careful attention to all legal compliances while starting or even terminating a venture. Letting loose can result in a higher payout than one might expect. "I had been running a manufacturing unit from 2007 to 2010 and was eligible to pay ESI for my employees to the government. Due to lack of experience and my carelessness, we ended up paying ESI + Interest + Penalty + Consultancy fee for the period 2010-2012 when we were not operational, just because we didn't check with our ESI Consultant if he had sent the department, a written letter about closure of the manufacturing unit", documents Agarwal.