A significant aspect of launching a business involves creating a well-thought-out plan and exhibiting the determination to put it into action. While being a part of a startup may not always be glamorous, it often entails surrendering oneself to the process. Eric Ries, in his book The Lean Startup, emphasizes the importance of mundane tasks, stating that his own experiences, as well as those of others, have taught him that success in a startup is not based on innate abilities or luck. Instead, it can be achieved by adhering to the appropriate procedures, which can be acquired through education.
In order to succeed in starting a new business, it is important to take precautionary measures to prevent common errors often committed by inexperienced entrepreneurs. To help you in this endeavor, here are nine missteps to steer clear of:
1. Not spending enough money or spending too much money.
It’s understandable that money is a top concern for new entrepreneurs, especially when cash flow is low. However, there are two dangerous attitudes when it comes to spending money: either spending too much, or not spending enough. While it’s wise to spend startup cash wisely, it’s also important to invest in quality products and people.
2. Thinking you have no direct competitors.
It’s easy to become excited about your new business or product and think that it’s unlike anything else on the market. However, the reality is that it’s rare to have no direct competitors. It’s important to do your research and understand what your competition is doing, so you can differentiate your business and stand out.
3. Making hiring decisions based on cost.
When funds are tight, it’s tempting to hire employees or consultants based on cost alone. However, this strategy can end up costing you in the long run. Low-cost employees may be inexperienced or unreliable, which could lead to mistakes and setbacks.
4. Not setting attainable goals.
Entrepreneurs can get caught up in their “big idea” and forget to set realistic goals. It’s important to set both short-term and long-term goals that are specific and attainable. By setting clear goals, you can determine what steps you need to take to reach them.
5. Not thinking about marketing
Many new entrepreneurs believe that their products are so revolutionary that they can just rely on free PR and word of mouth. However, the reality is that the vast majority of startups will need to invest heavily in marketing. This may include SEO, content marketing, PR, and paid advertising. Take a look at where your competitors are spending their marketing dollars and ask yourself how you can compete and differentiate yourself.
6. Having too small margins
Having a healthy profit margin will be critical to your success. Setting it too low now will make life infinitely more difficult for you in the future. Take a look at your production and operating costs and determine how much flexibility there is. Can you reduce these costs in the future if necessary? If not, choose a higher profit margin now to accommodate these costs.
7. Thinking you can do it all yourself
In the beginning, it’s common to think that no one can do the job as well as you can. However, this is not only a recipe for burnout, it can actually significantly impede your success. Having a knowledgeable, experienced consultant or mentor can give you much-needed objective perspective on your business and market.
8. Being incapacitated by fear of “what if’s”
Starting a new business is scary and isn’t for the faint-hearted. Being scared of failure and rejection is understandable, but letting yourself become incapacitated by this fear can significantly hinder your progress. Recognizing common fears is a great first step, as it reassures you others have been where you are now.
9. Prioritizing your product over people.
One of the mistakes that new entrepreneurs often make is prioritizing their product over their customers. While making money is important, it’s crucial to have a customer-first mentality and focus on creating satisfied, loyal customers who will continue to support your business over the long term.
Although mistakes are inevitable in the process of starting a new business, it’s important to learn from them and avoid repeating the same errors made by others.