11 Startup Mistakes People Make & How to Avoid Them

Startup Mistakes to Avoid

Several businesses start every year to solve different problems. But since most owners don’t have any experience and are amateur entrepreneurs, they make minor or critical mistakes that result in loss or failure. Here, we’ve gathered the top 11 startup mistakes that people make. Additionally, we’ll also guide you on how to avoid them. So, sit back and get into the details!

Mistake #1: Procrastination

Startup Mistakes Procrastination

Overthinking was never great for a business, especially negative overthinking. You might have read this [number] of startups fail, that [percent] businesses get the wrong beginning. But there are no stats about how many businesses and startups do not even initiate because the owner has a fear of losing.

Like all other fields, procrastination is not healthy for businesses. It puts you on a backfoot, and you start imagining situations that may not even occur. So, stay focused and cheer up. One way to avoid it is to look at the bright side.

Search how much profit a startup can give you or how people will perceive your startup when they find a solution in it. You can also pick a niche that you like the most. In this way, you will enjoy planning strategies and feel more confident to take the step.

Mistake #2: Starting Without a Plan

Rushing into things is also among the greatest startup mistakes. Several people get the idea and start focusing on one or two factors only to launch the company as early as possible. Sometimes they don’t even plan it all and just go for it. Unplanned startups have nothing to embrace once things start backfiring.

So, take your time and plan everything from business initial steps to billing and financing. Consider the marketing budget and production costs or service requirements. Do you need professionals or part-time experts to manage salaries? Analyze working space and amenities. It is only a big picture. These aspects vary depending on business models. So, analyze your idea thoroughly.

Mistake #3: Blinding from the Audience

Another startup mistake is going blind from your audience. You must analyze, value, listen to, and satisfy your customers to make sales. Some people get into businesses without researching the right audience. They think the startup will solve people’s problem but market it to the wrong ones. Or don’t think about how the audience will perceive it.

One way to select the right market is by doing proper research. Analyze which issue your product or service is resolving. Then talk to the target audience having that problem and ask how they want a solution to be. It will also help you to finetune your startup for a greater impact. Another method is beta testing, where you introduce your product or service to a small group of people and ask for their honest feedback.

Mistake #4: Incomplete Legal Process

Legal Process

Legal processes and papers work is a department everyone runs from, but it is compulsory. However, many people get stuck into legal complications either because they delay it too long or don’t know it at all. One major issue is registering a business, where the owner starts a successful running company without registering it. This mistake can cause a complete shutdown of the emerging business.

To avoid any legal issues, register your business as soon as possible. Next, get the services of a lawyer or legal advisor to understand the other essential boxes in the checklist. Make sure your startup is clean. Don’t run away from the taxes as it will affect you in many ways, like mentally, monetarily, wasting time, and business loss.

Mistake #5: Being the Lonewolf

One of the biggest startup mistakes owners make is handling multiple tasks themselves. More importantly, they don’t even talk to advisors or counselors for expert guidance before deciding. As a result, they make more business mistakes and overload themselves with work.

On the other hand, it also disturbs the work-life balance, which leads to other issues. Read about these problems startup business faces in our another expert’s blog. He has also included solutions for each issue, so you will know how to counter them by the end of the blog.

Never be shy to ask a professional for advice, and hire a dedicated worker. For instance, if you are starting a local restaurant, you may handle the management and hire some cooks with assistants. But don’t try to handle the reception and financial regulations yourself too, as it will just increase your workload. Hire a person and advisor for these positions, respectively.

Mistake #6: Improper Financial Structure

Although many startups fail initially, some fail just when they start blooming. What happens is that the owner generates a handsome amount from the initial business. They don’t make a proper financial structure and spend it all in one place.

It includes investing only in raw products, keeping all their money to themselves, purchasing unnecessary items, or spending with open hands. They forget about important factors, like employee salaries or bills. These amateur financial decisions create a shortage of money too early, collapsing startups. Nearly 44% of businesses fail due to the cash shortage and improper financial structure.

What you need to consider here is understanding the cash flow. Analyze how much income you will generate before starting or is generating (if your business is already established and start blooming). Next, understand all the areas of expenditure, such as salaries, tax, bills, investment on the next batch, personal spending, etc.

Now, plan the distribution and categorize your gross income spending evenly. You can also use multiple software tools or ask an expert for financial advice for assistance. But ensure you have a solid financial structure to give you profit from the cash flow.

Mistake #7: Wrong Partnerships

Startup Mistakes Wrong Partnership

To create bigger startups, you will need some business partners and investors. And here, many people make one of the greatest startup mistakes. They don’t consider much who they are approaching and partner with the wrong investors. As a result, they get into multiple disagreements after starting the contract, the partner doesn’t support and motivate much, they cause many financial instabilities, or sometimes it also causes legal complexities.

So, you can follow these tips to select the right partner for your startup:

  • Research well before choosing your business partner.
  • Analyze and compare their offers to decide who will be more suitable.
  • Clearly communicate and set defined goals with each other.
  • Never say ‘Yes’ to the first investor you approach.
  • Set the equity distribution before starting the contract.
  • Look at their tone, communication style, body language, and interest in your business.

Mistake #8: Neglecting Brand Identity

Ignoring to build up a brand identity is also among the biggest startup mistakes. Yes, several people work on establishing a great brand name and attractive logo. However, many new business owners don’t think much about making their company a brand.

They want success but don’t know how much the brand identity can positively impact it. So, they select a name that they like instead of creating something catchy and don’t focus on the logo or company’s visual representations.

You can avoid this mistake by researching the market. Choose which name will represent your brand perfectly, conveying the message yet feeling amazing to pronounce. Hire a graphic designer for perfection to create a logo and brand identity. Talk to him about the color scheme that will suit your startup well, and share thoughts on website design, branding images, etc. Also, don’t underestimate consulting marketers for opinions.

Mistake #9: Wrong Evaluation

Ignoring brand identity may (still) build your business gradually, but evaluating your product or service wrong will definitely bring a downfall sooner or later. It is among the most common startup mistakes, and several owners don’t even realize it until it starts backfiring. They either estimate it to be too low disturbing revenue collection, or too high, generating low sales. 

The mistake people make here is setting prices according to their competitors. It is more like a hit-and-trail method that normally doesn’t cause any trouble. However, the product may be giving low profit or causing a business loss.

Yes, you should keep an eye on your competitors, but a better way is to analyze and calculate the production costs or service requirements. Next, analyze your target audience capacity. It is extremely vital.

Take an example to understand it better. You open a lavish cafe with premium desserts, but your customers are primarily from slums or developing areas. Do you think they have the power to purchase it, or the business will gain profit?

Considering these factors will not only help you evaluate your product better but also assist in multiple areas, like location, audience selection, and even business model. Returning to our topic, consider your profit on individual sales and set the price. It will be close to your competitors. But if it diverts too much, reconsider the process and costs.

Mistake #10: Divergence

The last thing you want from your startup is to lose focus and diverge from solving the actual issue. Several factors contribute to shifting your attention from the main goal. Sometimes your investor pressurizes you. Sometimes, the other fields seem tempting, while sometimes, it’s just disorganization.

In any case, keep focusing on your goal and remind yourself what this startup’s purpose was from the very beginning. Frequently analyze your position and direction. Then, strategize logically toward your mission. Avoid temptations, and if your partner or investor forces you to do something else, discuss and clear goals with them.

Mistake #11: Being Too Optimistic

Last, we have a misconception that starting a business is exciting, entertaining, and a walk in the park. People read blogs and articles and watch documentaries about startups, which are mostly encouraging. But they conclude the initiation is easy from the positive words everywhere. Hence, it gives them unrealistic expectations and overestimations, one of the biggest startup mistakes.

The reality is that a startup is challenging and demands hard work, money, effort, time, and proper attention. It can be entertaining if you have an interest in the field or a passion for the business, but it will still be challenging. That’s why experts say to start a business you love. You can get the best business ideas from our other detailed blog and select the one that piques your interest. Otherwise, don’t raise your expectations too high since the initial days will be hard (for sure).


Startups are not easy to set up and build. It requires dedication and time, and many people get through it. However, several make mistakes that cost them a business loss or a shutdown. Since you know 11 of those startup mistakes and techniques to avoid them, you may get successful. So be optimistic (but not too much like the last mistake), work hard toward your goal, and grow with a bang. Good Luck!

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