5 Huge Mistakes Made By First-Time Entrepreneurs
Mon, 05/19/2014 - 2:01pm | by PatShuler
(and the principles that will help you avoid them)
Being an entrepreneur is fraught with challenges, but with the right mindset and a keen eye for the pitfalls, you’ll be better suited to turn your business, product, or service idea into a booming enterprise. Keep in mind the following points throughout the startup process to ensure that you avoid the common mistakes that sink most businesses before they ever get off the ground.
1. Being a fundraiser first
Your company needs cash to function; it’s no wonder that so many blogs, seminars, and websites devote so much time and energy into decoding all the fundraising ‘secrets’—but if you spend more time on fundraising than perfecting your business methodology and product, you’re building on a very shaky foundation. Great products and ideas often need outside help to take off, but if you’ve built a strong case and done your research, finding investors will be the easy part.
2. Growth without a purpose
Startups often have the misguided idea that they need to be as big as their competition, as quickly as possible. The opposite is true; use your small size to your advantage while you can. Small companies can shift focus and policies on a dime. They can get great tax breaks for everything from health care practices to going green, without a strategy overhaul. Don’t force your company to grow beyond its capabilities out of ego; as demand for your product or service grows, your clients and customers will let you know it’s time to expand.
3. Neglecting the boring details
Entrepreneurship takes people with enthusiasm and big ideas—but when you’re basking in that new-startup exuberance, it’s easy to be bored by the details. You probably won’t have enough money right away to hire a full time accountant and office manager, so pick up every possible time-saving tool for tracking your spending and project management. The easier you make these tasks, the more likely they are to get done—and they will absolutely sink your startup if you ignore them.
4. Believing your own sales pitch
Every entrepreneur should believe in her idea—but never ignore weaknesses, patch over flawed thinking, or lie to herself. The time for self-doubt and serious reflection is before you meet with investors, pitch clients, and hire employees; because if there are weaknesses to be found, you can bet a smart investor will find them. Don’t be a pessimist, but don’t be afraid of the truth, either. Successful entrepreneurs find the flaws in their business model first, and then face the world with real excitement.
5. Ignoring common sense
Do you have a dying business? Never be afraid to admit that your initial business plan, product design, or idea was wrong. The quicker you learn to spot a sinking ship, the better off your next project will be. Don’t give up on a good idea; but also, don’t sell yourself short—great ideas usually aren’t once-in-a-lifetime. Once you decide to let an idea die, you can then invest all your time and capital into a better plan, armed with knowledge of the mistakes you made before. If you’re doing it right, your successful business will likely barely resemble your initial plan. Instead it will be full of great ideas brought by employees, customers, and the competition.
Patricia Shuler is a Mobile Moo staff writer from Oakland, California. She’s an admitted tech-junkie who’s quick to share her honest opinion on all things consumer electronic—including up-to-date news, user reviews, and “no holds barred” opinions on a variety of social media, tech, computer, and mobile accessories topics.