Starting your own business can be one of the most fulfilling experiences in your life. It can also be stressful, frustrating, and at times feel like a terrible decision.
Luckily, you can learn from those who have gone before you, and avoid making these 12 common mistakes.
1. Waiting too long
Many entrepreneurial-minded people are already seen as rising talents at established businesses or larger corporations. Don’t make the mistake of believing you need 30 years of business experience under your belt or a million dollars from a venture capitalist to begin your own business.
2. Going it alone
The business community is a strong and social set based on making and building personal connections. Use your own network to find mentors who will give you advice and encouragement along the way.
3. Working backwards
Some entrepreneurs are struck by that “million-dollar idea” and race towards the end result by diving into a new business. While starting is important, equally important is having a clear plan with manageable goals. An entrepreneurial consultant, or others from your network, can help you work through things in a logical order.
You only have so many hours in a day. Spending a little extra money to hire an accountant and a few key staff you can rely on makes sense. That way, you’re free to spend your valuable time on moving your vision forward, instead of answering phones and shuffling paperwork. Better yet, build a small core of A-team members who own stock and are committed to work for next to nothing until you get the machine revved up.
5. Giving talent away
Your thoughts, ideas, skills, and products are worth something. Many new business owners make the mistake of giving up some or all of these things for free. By ensuring that you are compensated, either monetarily or through valuable advice and connections, you are showing others that you know your work is of value! This will earn you both profits and respect. Of course, giving back to the community and the entrepreneur ecosystem is socially responsible and rewarding. Just keep cause donations and revenue generation clearly separate in your mind.
6. Being disorganized
Small business owners tend to be creative souls. You will need all of that creativity to make it, but it isn’t an excuse to let the daily functions of your business slide. To-do lists, receipts, bookkeeping, returning emails and phone calls, ordering office supplies and staying current in your research are all vital parts to a business. If you are lacking in organizational skills, hire someone to help you. I married a CPA. That’s one way to keep the numbers straight.
7. Taking shortcuts
Business isn’t always a race, and it isn’t easy. Short-changing yourself now to get ahead may not end with a payoff later. While efficiency is key, quick and easy methods are rarely best for a company. If something sounds too good to be true, it probably is. Do your research and always keep the long-term goals of your company in mind when laying the groundwork for production, sales, payment options, taxes, hiring, and all of the little things that keep your business running. I teach a process of hypothesis testing and business modeling to startups so they stay focused on the target market and building something customers will actually buy.
8. Going into debt
While some business loans are necessary, if the current economic climate has taught us anything it’s that money is never free. Don’t spend capital you haven’t made yet. Treat your business just as you would your household — live within your means and never go into debt without a clear path for getting out. Learn how to nail the pain, the solution, and the business model before spending huge investor money on massive production or distribution.
9. Worrying about failure
Of course we are all concerned about failing. Just don’t allow fear to stop you from trying. The bottom line is, if you don’t test your ideas, you’ll never know if they worked. So make a plan, jump in and test those theories, products, and marketing themes out. Michael Jordan once said, “limits, like fears, are usually illusions.” Tom Hopkins teaches to “never see failure as failure, but only the game I must play to win.”
10. Quitting your day job
You’ll have to invest time — a lot of it — into any new business venture you come up with. This doesn’t mean that it’s a great idea to leave a secure position with benefits that is currently supporting your family. Instead, turn your hobbies and passions into a side business. Work through evenings and weekends to make your ideas a reality. And try them out on a small scale to make sure your business is going somewhere. You can also get a feel for whether or not you like working for yourself before taking a drastic plunge into relying only on the income you can generate for yourself. Take an entrepreneurship class. Find mentoring watering holes for entrepreneurs like 1 Million Cups or similar to your local UVEF.net group — connecting money, markets, and mentors.
11. Keeping secrets
It seems obvious, but the best way to build a business is for everyone to know about it. Many new entrepreneurs are so paranoid about the competition stealing their concept that they keep everything under wraps until the actual launch date. The truth is, most successful companies aren’t the only ones working on an idea. Learn instead to fail faster. It’s much better to talk about your plan with as many people as possible in order to gain feedback and word-of-mouth marketing before you ever start. Then deliver on the promise of your idea. And do it better — and faster — than everyone else.
12. Giving up
Starting out in business is extremely hard. Most people won’t turn a profit right away. It takes a lot of time and energy to build a successful company. Understand your goals and remember what gave you motivation in the first place so that you can keep going when things get tough.
Any of these sounds familiar? What helped you grow as an entrepreneur? Let me know in the comments section.
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