Dodge these bullets so you can live large!
Starting your own company is an exciting prospect, but it’s also full of a lot of uncertainties. Whether you’re recently out of work or school, or have been planning your big move for a while, you can’t afford to waste time or resources on unnecessary mistakes. Here is a great list of the mistakes you can and should avoid when starting your first business, compiled from several entrepreneurs who have been around the block.
1. Ego-driven growth
You’re not in the entrepreneurship game because you think small; but remember that most new ventures take a while to grow, and they can be sunk if you try to expand for the wrong reasons. Remember that small businesses are agile and effective in ways that large competitors can’t match--use that to your advantage in the early days so you can afford to try new things, make mistakes, and create a business that is built to last. When it’s time to expand, your customers will let you know—it should never be about ego.
2. Being a pitchman, instead of an entrepreneur
Entrepreneur sites are inundated with articles and ideas about scoring fundraising, and for the uninitiated it might appear that 90% of the job is simply finding and securing funding. Fundraising is important, but the best way to attract investor interest is by creating. Focus on what your company actually does, and build something you can be proud of before you go looking for investment. If you have a great product,other finance options will open up and funding will find you, allowing you to call the shots on how much equity you’ll be giving up in exchange for cash now.
3. Ignoring the boring details
One of the biggest mistakes startups can make is outsourcing their accounting to another company—or worse, ignoring fiscal and legal issues altogether. Keep things in house, and on the cheap. Use free software, like Mint or Google Docs, and a part or full time accountant. Do your own research on money management tips, and learn the inner workings of your company’s budget and cash flow. When it makes sense to outsource, do it with trusted companies—accept credit cards online through secure providers, and have your marketing done by a reputable team.
4. Inability to step back from ideas
The passion and enthusiasm that animates entrepreneurs is a powerful asset, but only those that can admit and recognize quickly when they’ve made a mistake will succeed. If you don’t learn how to poke holes in your own ideas, your investors, customers, and competition surely will. Before you make a pitch or start a new initiative, get out the whiteboard and take some time to think carefully about drawbacks, unintended consequences, and potential pitfalls. Remember that you’re not working for the success of any one idea—you’re working for the success of the company, and that takes adaptability.
5. Going down with the ship
Another challenge that irrepressible innovators face is the pain of letting an idea or business go. This doesn’t mean you should be a pessimist or a doomsayer—in fact, the reverse is true. Entrepreneurs who are willing to let go of a bad business model recognize that they have more than one big idea in them—they understand that businesses fail all the time for many reasons, and the quicker they cut their losses from a failing venture, the sooner they can get excited about a better one.
Tara Wagner is a staff writer for TechBreach. She has worked from home for over a decade, and loves sharing news and advice with fellow telecommuting moms and dads. She's fascinated by new tech and new ideas; and when she finds time to unplug, she enjoys long hikes in the mountains near her home. She lives in Denver.