How to Sabotage Your Startup in 5 Steps

No matter how good the idea or the product, there are a number of things that can quickly drive startups out of business. Those at the helm of startups, evened seasoned business leaders, should avoid these common missteps if they want to succeed.

Not Understanding the Market

Many startups fail because they misjudge the amount of demand for their idea and what people are willing to pay. Any new business should take the time to thoroughly research market size, competitors and rates before going all in.

There will be some degree of volatility in most markets, but you can do enough research to at least give yourself a good shot at choosing a market in an upswing and avoid goods or products that are likely on their way out. You can find market analysis tools at SBA.gov to help you narrow down potentially lucrative industries and avoid ones that are becoming obsolete in our changing world.

Chasing Bad Deals

Some deals are not worth it, but it can be hard for startups to realize this until it's too late. If a potential customer wants a discount that erases business margins or has service requirements that exceed the company’s capabilities, then they are probably not a good fit. Don't be afraid to walk away from a deal that doesn't make financial sense.

It can be a tricky line between negotiating terms with a client and letting an outside business dictate how your business functions. You may not want to lose that large partner and feel obliged to change your process to accommodate their specific requests, but if you are unable to do this in a way that still allows your company to fulfill its end of the bargain while still retaining a comfortable profit margin, then it may be wiser to pass on the deal.

Investing in the Wrong Things

Startups can sabotage their long-term potential by investing too heavily in the wrong things. For example, buying a building instead of renting can sound like a good idea, but that purchase could absorb a lot of cash and leave the company with smaller reserves. Startups must think about the long-term viability of investments and also about the trade-offs they're making.

Ignoring Workplace Safety

Startups should offer a comprehensive safety plan to mitigate health risks. This might not sound exciting, but a simple slip-and-fall case can lead to legal action from employees, inspections from government agencies, and a set of expenses that the startup is not prepared to handle. A corporate safety expert who earned their safety degree online says startups should focus on preventing accidents and making sure all new employees receive the necessary safety training. This can go a long way towards preventing incidents.

Giving Up Too Soon

The media tends to focus on the exciting startup stories: guys who succeeded with one big bet or products that saw explosive growth. But most businesses take years to become successful and even the best new product might take a while to gain market share. Startups risk unnecessarily abandoning their goals if they aren't willing to stick it out during slow periods or work through hard times. Startups should be prepared for the long-haul if they really want to succeed.

Startups can sabotage themselves in a number of ways, but they can also grow and succeed. It's important to be aware of how things can go wrong, but startup founders should not let the fear of failure stop them from taking the next step. Instead, founders should remain aware of the risk, but optimistic about the opportunities.