So you’re thinking of taking up the glamorous role of entrepreneur, quitting the daily grind of life as an employee and venturing into uncharted territory as your own boss. There’s plenty to think about; strategies to draw up and ideas to test; financing to organise and, of course, a wealth of paperwork to fill out. However, if you have a great idea then everything should just fall into place for you, right?
Unfortunately, like most things in life, this is very often a dangerous way to think. Your idea might be great and your business plan comprehensive, but there is still a whole host of obstacles to navigate on your way to building a successful company. In fact, the learning curve for new business owners is very steep and takes perseverance and stamina to master.
Naturally, mistakes are part of the learning process for your new life as an entrepreneur, however, with a little forethought and planning, there are many that can be easily avoided without missing out on valuable lessons. Here, we take a look at 7 common mistakes to avoid with your first start-up – giving you a running start to your new life as a business owner.
Drafting a half-hearted business plan
You might have heard this a thousand times before but a business plan is truly the cornerstone of a successful business. If you skimp on the details here, then they may come back to haunt you later down the line. Make sure you draft a solid business plan that touches upon multiple success scenarios. Additionally, include financing options and potential pitfalls that can be anticipated now.
As a further note, it is also advised that your business plan includes an exit strategy for the future. This is designed to help you transition seamlessly into your next venture should you decide to sell the business. Most successful entrepreneurs always keep an eye on what’s coming next, and so should you too.
Ignoring constructive criticism
Constructive criticism from peers and seasoned business owners is a priceless resource for new entrepreneurs. Many, enthused by the “disrupter” mentality, plough headlong into a venture ignoring all pleas and offers of advice. This can very often be, not only ill-advised but also destructive to your new business. After all, these individuals have experience doing the same thing, plus, they can offer you a more objective perspective on your fledgling enterprise.
With this in mind, wherever criticism is constructive and well-meaning, take a deep breath and try to understand what is being said. By doing this, you stand to learn a lot more, a lot more quickly than you would if you had made the mistakes alone.
Not being flexible
Inflexibility is a killer, particularly for new business owners. Much like the advice offered on constructive criticism above, you might receive input on your ideas and plans as your business develops. A rigid adherence to your own vision at this point may be a dangerous tactic.
For many new business owners, the reason they got into the start-up world was because they thought their ideas were better than those around them. This may be true, but you should also be flexible enough to adapt and change as the market demands. By doing this, you stand a much greater chance of success.
Doing it all alone
There’s a certain amount of bullheadedness in all entrepreneurs. Things need to be done and they need to be done right. However, as a business owner, you need to learn to delegate since doing it all alone is simply not an option when it comes to running a successful start-up.
You will need to strategically plan what needs to be done and by whom, however, if you are still anxious that things won’t be done in a manner acceptable to you, then try to implement an employee guidebook or best-practice guide. This way you can ensure things are done correctly without having to do them yourself.
Growing too quickly
So your business is running smoothly and you are seeing some very encouraging signs. However, forcing growth from your business at this point in your entrepreneurial journey can be damaging to your longer-term success. In fact, scaling a fledgling venture too quickly is usually a recipe for disaster.
In your first two years of operation, you should work on a basis of extreme frugality. Even after this period you should try and ensure any investment you make will bring returns that can be reinvested into the company. This is as true for hiring new employees as it is for innovative marketing plans, so make sure you are certain of the real value of any expansion.
Spending everything you have
Entrepreneurs generally invest a lot into start-up ventures. This includes time, passion, creativity, and of course money.
It’s perfectly natural to want to throw everything you have into making your first start-up a success, however, when it comes to money, it pays to be a little more reserved. Particularly if it means failure will literally mean you are out on the street.
Additionally, if your business model is unsound or your idea does not stand up to scrutiny, throwing money at the problem won’t make it go away. The important thing to take away from this is that you should know when to call it a day. Doing so at the right time will give you the opportunity to try again with something new.
Whilst many of the mistakes mentioned are easily avoidable, a fear of failure is one of those things that can insidiously creep up on you without you even realising. Try to remember that the life of an entrepreneur is inherently filled with risk and, rather than take away the negative points from mistakes made, you should be turning them into a positive.
Failure and making mistakes go hand-in-hand with the start-up scene, so try to speak to peers and other entrepreneurs about how they dusted themselves off after their own challenging times. Additionally, always keep our advice close to hand to ensure you avoid the most obvious and basic mistakes as you progress.