Every business owner wants to be their own boss, so heeding sensible startup advice will help you enjoy the benefits of entrepreneurship and avoid the typical mistakes that will slow you down.
It’s hard to avoid certain mistakes, especially when you face a situation for the first time. In fact, many of the following are hard to avoid even if you’re an old hand.
1. Big Customer Syndrome. If more than 50 percent of your revenues come from any one customer you may be headed for a meltdown.
2. Creating products in a vacuum. You and your team have a great idea. A brilliant idea. You spend months, even years, implementing that idea. When you finally bring it to market, no one is interested.
3. Equal partnerships. Maybe you and a friend start the company together. In each case, you and your new partner split the company 50/50. That seems fine and fair right now, but as your personal and professional interests diverge, it is a sure recipe for disaster.
4. Low prices. Some entrepreneurs think they can be the low price player in their market and make huge profits on the volume.
5. Not enough capital. Check your business assumptions. The norm is optimistic sales projections, too-short product development timeframes, and unrealistically low expense forecasts.
6. Out of Focus. Many entrepreneurs – hungry for cash and thinking more is always better – feel the need to seize every piece of business dangled in front of them, instead of focusing on their core product, service, market, distribution channel.
7. First class and infrastructure crazy. Many a startup dies an untimely death from excessive overhead. Keep your digs humble and your furniture cheap.
8. Perfection-itis. This disease is often found in engineers who won’t release products until they are absolutely perfect.
9. No clear return on investment. Can you articulate the return which comes from purchasing your product or service?
10. Not admitting your mistakes. Of all the mistakes, this might be the biggest. At some point, you realize the awful truth: you have made a mistake. Admit it quick. Redress the situation. If not, that mistake will get bigger, and bigger, and… Sometimes this is hard, but, believe me, bankruptcy is harder.
As we’ve said before, most start-up failures and mistakes can be mitigated by proper planning and learning some basic small business management skills.