7 Common Management Mistakes New Startups Make (And How to Avoid Doing Them)

Startups are known for their innovation and passion, but management is where many startups fall short. If you are in the process of launching your new business, you must avoid some of the most common management mistakes that new startups make. Keep reading as we discover these common mistakes and how you can avoid them in the future.

good to great by jim collins

Good To Great

by Jim Collins

⏱ 16 minutes reading time

🎧 Audio version available

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Trying to Do It All Alone

As the startup founder, you might be starting this business journey alone or with a small team. Many startup founders find themselves wearing many hats to save costs and avoid employing someone else full-time. While this is an excellent strategy to begin with, as soon as you find your workload is getting to be too much, it’s time to start delegating. As a manager, you need to ensure your team takes full responsibility for their work and doesn’t rely on you every moment of the day. Delegation is a challenging skill to master, especially when you are passionate about your startup. However, as your business grows, it’s the only way you’ll be able to survive without burning yourself out.

A Lack of Organization

Running a startup requires you to be incredibly organized. Even if you only have a small team, you need to ensure you keep on top of your to-do lists and deadlines. You’ll likely have hundreds of things going on at once, but make sure you schedule your time and plan who will look after what part of your business. While this might seem like a basic management tip, you’ll be surprised by the number of startups that fail purely due to a lack of organization. Find a way of organizing tasks that work for your business and stick with it.

Hiring Too Soon

While we encourage you to hire new employees as soon as possible, avoid hiring team members too soon. If you can’t afford to pay yourself anything just yet, this is a good sign you can’t afford a team member. Think about whether you can use freelancers or temporary employees instead of taking on a permanent full-time employee. As well as the financial side of taking on employees, you also need to be willing to let go of some control of your business. If you aren’t mentally prepared to become a manager just yet, you might find yourself micromanaging your team every day. This will soon create a toxic environment that will make working for your company unpleasant for everyone involved.

Not Expecting to Be A Manager

As the founder of a startup, you are likely very passionate about the product or service you plan to offer. However, many business owners neglect to think that they will be a manager in the future. While there are ways you can delegate this responsibility as your business grows, you will still have to take on the role of a manager in many ways. It’s never too late to start learning more about business management and leadership. We encourage you to learn the difference between a good manager and a leader and apply these lessons to your everyday actions within your startup.

Neglecting to Register the Business

If you are employing a team within your business, you’ll need to ensure you register your business and follow the proper legal guidelines to employ team members. You can’t employ other people without setting your business up correctly, and you’ll find that you could be left in a very tricky situation if you don’t follow the proper procedures at the start. Of course, the last thing you want as a startup is to be sued by one of your team members, but sadly, this happens. So make sure you aren’t overpromising and underdelivering anything to your team to avoid risking any damage to your business in the future.

Startups Should Avoid Hiring Specialists

Especially within the tech industry, you find that many startups focus on the hard skills of their new employees. While you might need an employee to fulfill a specific role in your organization, focus on finding good all-rounders willing to chip in with other tasks. This is critical for startups looking to work with a tight budget initially, as you’ll need hardworking staff members who are willing to go the extra mile. Then, when your company starts to grow in the future, you can add on specialists instead of focusing on generalists as you should.

Underestimating the Demands of a Startup

A startup is incredibly demanding to launch, but you’ll be surprised how many people overlook this fact. You need to be very open with your employees about your expectations and goals to ensure you are all on the same page. This is why employees’ soft skills are sometimes much more valuable at this stage than their hard skills. Both you and your team will find there are some incredibly tough days as you launch your business. Ensure you are rewarding your team fairly and treating them with respect at all times. Remember, although the company is your pride and joy in life, they also have a life outside of work. Never forget this or expect too much of your employees, as you’ll soon be left without a team.

By keeping these common management mistakes in mind when launching a new startup, you can ensure you avoid making any of these errors in the future. When taking on a management position for the first time, it can come with many challenges. We know that startups often work with limited budgets, but the more you can focus on looking after your team, the harder they’ll be willing to work with you. As your business continues to grow, you’ll only be expected to juggle more tasks each day. The earlier you overcome these common management errors, the more likely you’ll be to succeed in the long run when launching a startup.

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