6 Startup Mistakes That Can Stunt Business Growth


There’s a lot that can stunt your business’s growth. Financial problems, inefficient staff, negative reviews, and slumps in the economy are just some of the threats your startup may face.

Many business setbacks are out of your control. However, you can safeguard your enterprise by avoiding a few common startup mistakes.

6 Common Startup Mistakes—and How to Avoid Them

When you’re starting a business, you are laying the groundwork for your startup’s future. Although mistakes happen, avoiding these six startup mistakes can set your small business up for success.

1. Not having a business plan.

Before you give a timed presentation, you likely prepare. You might take advantage of notecards, slideshows, or cue cards so you know where your talk is heading. Without a plan, you can easily get off track, never reach the main point of your speech, and lose listeners’ attention. Shouldn’t your startup get some cue cards, too?

Your business plan is your startup’s cue card. Business plans contain key information like your mission statement, product or service descriptions, marketing strategy, financial projections, your business type, and market analysis.

It can be easy to veer off course when you’re first starting your venture. But when you write a business plan, you have a roadmap that can help you stay, or get back, on track.

Business plans are also critical if you want to apply for business loans or investments. Lenders and investors need to see where your business is going before they give your startup funds. And, you need to articulately tell them the ins and outs of your business.

Before creating your business plan, narrow down your startup’s purpose, isolate your target audience, and research competitors and gaps in the industry.  

2. Growing too quickly.

You cannot expect your startup to fly from Point A to Point Z. Even if your startup takes off faster than you predicted, hold off on expanding.

Trying to grow too quickly can end up dooming a promising startup. According to Startup Genome, 70% of startups expand too early.[1]

Hiring too many employees can be unnecessary and costly for a new startup. Determine if you can manage operations on your own or with a limited staff before bringing on additional costs.

If you received investments, business loans, or steady revenue, it can be tempting to pour the money into advertising, getting a better business storefront, or developing new products. Instead, grow slowly and measure your efforts. For example, spend a frugal amount on advertising and measure your return on investment (ROI).

Before thinking about expanding your business, you need steady profits, loyal customers, a cash reserve safety net, and a solidified brand. As a general rule of thumb, don’t expand when your business is in its startup stage—wait until your company has been profitable for at least three years.

3. Marketing ineffectively.

When you’re starting your enterprise, every dollar counts. You don’t have thousands of dollars to spend on huge marketing campaigns. Consider crafting inexpensive marketing strategies that are targeted to your audience.

A few inexpensive marketing strategies include starting a small business blog, actively engaging customers through social media, and using email marketing. Targeted marketing efforts will save your startup money while also reaching your intended audience. Why use a nationwide advertising campaign (e.g., television or radio) if you are a small, local startup?

Before you can market, you need to know your audience. Then, build marketing materials that are tailored to them. For example, be present on social media platforms that are commonly used by your target audience.

4. Neglecting the importance of developing your brand.

If you want to market efficiently, you need to build and emphasize your business brand. A brand is what comes to mind when customers think about a business. Your brand is everything associated with your business, including your mission statement, logo, color scheme, business name, and startup story.

When developing different aspects of your brand, think about your favorite brand. Why do these brands speak to you? How do these businesses highlight their brands in their marketing strategy?

Creating your brand takes patience and consistency. Your marketing materials should reflect your startup’s brand. Having an inconsistent brand will make your marketing strategy ineffective.

If you have employees, show them the value of your brand. If your workforce doesn’t believe in your brand, how will strangers? Encourage employees to be brand ambassadors who advocate for your startup.

5. Failing to reinvest profits into your startup.

Are you cutting yourself too big a share of your business’s profits?

Most small business owners pay themselves 50% or less of their business’s profits.[2] If you’re taking the majority of your startup’s earnings, consider scaling back. Reinvest part of your profits into your startup to encourage growth and defend against periods of negative cash flow.

Your startup is going to get stale if you don’t continually invest in it. And if you want to eventually grow and expand your business, you need to think about investing in its future.

Investing in your startup can help increase your marketing efforts, grow your workforce, and make changes that can grow your future profits.

6. Not taking advice.

Twenty percent of startups fail in their first year. Rather than become part of this statistic, protect your startup by taking advice from experts.

Learn from those who have been through the startup process. Join your local chamber of commerce, attend community events, and join professional Facebook groups to connect with seasoned business owners.

Contact professionals throughout the course of running your business, especially when you’re just starting out. Reach out to and take advice from accountants, lawyers, and investors. Experts can help you make financial decisions, structure your startup, create a business plan, and file (the all-important) taxes.


Launching a startup can be both exciting and nerve-wrecking—you’re pouring your time and energy into a business you believe in and hope to see succeed. Use the advice offered here to steer clear of these common startup mistakes and give yourself and your business the best possible chance at success.

Article Sources:

  1. Innovationfootprints.com. “Startup Genome Report Extra on Premature Scaling
  2. NFIB.com. “Small Business Salary: How to Pay Yourself

Rachel Blakely-Gray

Rachel Blakely-Gray is a content writer at Patriot Software, LLC. Rachel enjoys providing actionable, growth-oriented content. Her work has also appeared in Startup Nation, Bplans.com, Laptop Hustle, CPA Practice Advisor, Recruiter.com and more.

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