Common Blunders Startups make: Part 1/2
(1) Over-prioritizing wants, under-prioritizing needs
Often, peer comparison leads to this. You see other founders getting swanky offices, expensive subscriptions, nice-to-haves, and you think those should be your next moves.
This is a classic mistake of comparing yourself to what you shouldn’t be comparing yourself to!
In doing so, you put on more fat in your business, which isn’t easy to cut.
(2) Being blind to hidden costs
Founders ignore all sorts of hidden costs which may not be obvious in first sight.
An example is how most amateur founders calculate the cost of an employee. The cost of an employee is always 1.25 to 1.5 times of their basic pay. This extras of taxes, workmen compensation, fringe benefits, laptops, equipment, often slips into the back of their minds.
(3) Gross miscalculations due to over-planning
For a startup, almost everything remains uncertain in their nascent years, including income and expenditure.
The problem with long-term planning is you always remain vulnerable to overestimating your revenue and underestimating your expenses.
You can avoid this by creating shorter financial plans, on a quarterly or half yearly basis.
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