There are some universal tips which are not connected to any specific industry. We have been talking about good business advice in our previous article. But you can turn things 180 degrees around and talk about bad hints in the same way. Here is the list of 8 bad pieces of advice you should never listen to. Unfortunately you can often listen to them.
- Focus on something.
Sounds reasonable, right? Of course, if you are an employee. If you are a CEO, you have to keep on many things that are running in your company. Leaving accounting in favour of business development in the long run will not be a wise idea and will generate more troubles in future.
- You can always replace your employee
If something doesn’t work or the results are not satisfying it is easy to say that the best way is to fire the responsible person. Big mistake. There are many problems with this approach to this topic. First of all: bad atmosphere at work. This could lead to the lower motivation, worse outcome and general dissatisfaction from work.
Secondly: hidden resources (not only costs!) . You will have to spend some resources for recruitment, i.eg. some job advertisement, meetings with candidates, initial training and initial work review. Also, introducing a new employee consumes time and money and you will have to wait (sometimes a few months) until a new person will be able to use his or her full potential.
And lastly: it is extremely difficult to replace one person and do not interfere with roles in a team. It will cost you time to build (once again) a harmonious and efficient team.
- Investor is necessary
Many startups have only one goal: to get a round of investment. They have various skills and ideas, and the only thing they are missing is money. The easy way is to look for it in VCs or Business Angels. The thing that is not seen is that the best investor is your client. If you will make your first sales you will be able to organic grow, and in many cases that will be enough.
And if you will still need investment in order to not miss the market opportunity, you will have a much better position in the negotiation process. Also, not every investor is a good investor. Bad one can bring good business to the bottom simply just by transferring its problems to a startup.
Also remember that discussions and negotiations with investor(s) take time and resources. Do not do that at the expense of your clients.
- Cheaper, the better
Sales not going well? Decrease the price – it will help! Unless not. Maybe 30 years ago it was true, nowadays we are in a different situation. Customers are much more aware about the costs and benefits of specific solutions. The product with the same functionalities that costs half or 1/3 of the price will not gather much trust. It is even more true in B2B sales. Maybe you are not sure about your product thus the price is so low? Or you are not offering additional services or guaranties? Low price will arouse concern, not gain interest. So remember that customers have different perceptions of value, they may associate price with quality, for example. If you are still not convinced enough, please check the Chivas Regal effect observed since the 1980s.
- No competition is a good sign
You are working on a solution and see that no one else is present in the market? Double check the reason for this situation. In some cases you will be a true innovator and pave the way like Elon Musk but in most cases you might face serious troubles. Maybe the clients are not willing to pay for the solution you are offering? Or will there be some real technical problems really costly to overcome? Or is the market simply not ready for a specific product? If there was a competition in your field and disappeared for some reason it is not a good sign. Unless you are aware of the causes and have the idea how to overcome them.
- Stick to a Business Plan
Creating a Business Model at the beginning of your journey with a startup is burdened with many unknowns. You might not know exactly the technical specification of the final product, thus it might be difficult to estimate the price. This and many other information will vary during the development of your business. Do not be afraid to review and change the business plan, or even start from zero at some point! The worst thing you can do is to attempt to predict the future, and not spend your time building your business. During the time your business model will change, and you must get used to it.
- Always improve TRL
During the development process you will aim to constantly improve your solution. In general it is a good idea. But do not be afraid to take one step back in order to make three steps ahead. Sometimes you will face troubles which will lead to the dead end. Do not worry about redesigning the solution. In the end you might release a product without redundant disadvantages and usabilities.
- A great product sells itself
Often a lie that is repeated by an experienced salesmans. It does not include years of training, negotiations and hundreds or thousands of closing deals. It will require a lot of work from you to gain attention, interest and desire in your customers – even with the best possible product on the Earth. You will need to establish relationships or get in touch with advisors who will connect you with decision making representatives of the large enterprises (or other customers). Do not focus only on developing your solution, but also consider spending some time on marketing. It will pay off in the future.
Author: Wojciech Leonowicz
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