Everyone makes mistakes, and it’s no different for entrepreneurs launching a new business. Getting a little tripped up here and there is natural, but for a startup, even little errors can become costly down the line.
Luckily, countless entrepreneurs have blazed the startup trail before, and many of them have committed common mistakes the rest of us can learn from. With a little bit of planning and the wisdom to learn from the advice of others, you can avoid some typical stumbling blocks.
1. Don’t be afraid to fail
“The biggest mistake you can make is to be afraid of failure. Failure is key to your success, and jumping into your fear is very positive for your future business. How you pick up after failure and learn from your mistakes is the key to great success.” – Audrey Darrow, president, Righteously Raw
2. Get organized
“Being organized is key. Running a small business is like being a circus ringmaster. It’s normal to have dozens of things happening at once. So, I have a daily task list, things that I need to do. And I list them by their priority. It sounds simple, but it works, and makes me far more productive.” – Tara Langdale-Schmidt, founder, VuVatech
3. Don’t misinterpret your market
“The biggest mistake a business owner can make when launching a startup is misinterpreting the market. Whether it is underestimating [or] overestimating costs, appealing to the wrong target demographic, or poorly gauging the demand, misinterpreting your market can end your business before it even starts.” – Nabeel Mushtaq, COO and co-founder, AskforTask
4. Learn how to delegate and avoid micromanaging
“As a startup, there is sometimes a lack of self-awareness. Founders in the early stage are not great at delegating work to their team members. They try to do everything that they possibly can to cut costs, but really, in the long run, they should have delegated the things that they are not good at and focused on their strengths. If you are aiming for multiple targets at once, you are very unlikely to hit one.” – Matt Pyke, founder and CEO, Fly High Media
5. Don’t hire too soon
“By far, the biggest mistake a startup can make is hiring employees too soon, such as hiring full-timers when a part-timer might make more sense, or hiring an employee when a subcontractor could have done the same job/function. It is very easy to run a small business with part-timers, subcontractors and the services of other professionals.” – Joseph C. Kunz Jr., CEO and president, Dickson Keanaghan
6. Don’t get tunnel vision when raising money
“[It’s a mistake] focusing on raising money instead of customers and product-market fit. Once companies have a product, many focus on raising money. But they should focus on customers and product-market fit, making sure their value proposition and offering resonates with a market and will get traction.” – BJ Lackland, CEO, Lighter Capital
7. Don’t avoid contracts
“One of the biggest mistakes a business owner/entrepreneur can make when starting a business is the failure to implement contracts. No matter how good relationships may be, they can come to a screeching halt when systems and agreements are not put in place.” – Michelle Colon-Johnson, founder, 2 Dream Productions
8. Don’t give yourself the wrong salary
“Paying yourself too little or too much [is a mistake]. It’s often easier to determine the salary for a new hire than determining an owner or partner’s pay. Consider paying yourself a percentage of revenue. Whatever you choose, make figuring out your pay and that of your partners a practice and foundation to healthy expectation of management.” – Diana Santaguida, co-founder and creative director, SEOcial
9. Don’t move too slowly
“Having been a first-time founder who made many mistakes, I realize in hindsight that I never made decisions fast enough. I was slow to recognize that a relationship with a business partner wasn’t working out, that my customer wasn’t willing to pay enough money to sustain our business, that investors weren’t interested in funding my business no matter how much they liked me, etc.” – Sam Rosen, CEO and founder, MakeSpace
10. Grow at the right pace.
“I have had a lot of people who want to invest in my company. One of the biggest mistakes you can do is partner with someone just because of the money. The investor is more important than the money. You need to pick someone that shares your vision and morals. It is OK to be picky when it comes to an investor.” – Tara Langdale-Schmidt, founder, VuVatech
Changing Role of Entrepreneur
Entrepreneurs occupy a central position in a market economy. For it’s the entrepreneurs who serve as the spark plug in the economy’s engine, activating and stimulating all economic activity. The economic success of nations worldwide is the result of encouraging and rewarding the entrepreneurial instinct.
A society is prosperous only to the degree to which it rewards and encourages entrepreneurial activity because it is the entrepreneurs and their activities that are the critical determinant of the level of success, prosperity, growth and opportunity in any economy. The most dynamic societies in the world are the ones that have the most entrepreneurs, plus the economic and legal structure to encourage and motivate entrepreneurs to greater activities.
For years, economists viewed entrepreneurship as a small part of economic activity. But in the 1800s, the Austrian School of Economics was the first to recognize the entrepreneur as the person having the central role in all economic activity. Why is that?
Because it’s entrepreneurial energy, creativity and motivation that trigger the production and sale of new products and services. It is the entrepreneur who undertakes the risk of the enterprise in search of profit and who seeks opportunities to profit by satisfying as yet unsatisfied needs.
Entrepreneurs seek disequilibrium–a gap between the wants and needs of customers and the products and services that are currently available. The entrepreneur then brings together the factors of production necessary to produce, offer and sell desired products and services. They invest and risk their money–and other people’s money–to produce a product or service that can be sold at a profit.
More than any other member of our society, entrepreneurs are unique because they’re capable of bringing together the money, raw materials, manufacturing facilities, skilled labor and land or buildings required to produce a product or service. And they’re capable of arranging the marketing, sales and distribution of that product or service.
Entrepreneurs are optimistic and future oriented; they believe that success is possible and are willing to risk their resources in the pursuit of profit. They’re fast moving, willing to try many different strategies to achieve their goals of profits. And they’re flexible, willing to change quickly when they get new information.
Entrepreneurs are skilled at selling against the competition by creating perceptions of difference and uniqueness in their products and services. They continually seek out customer needs that the competition is not satisfying and find ways to offer their products and services in such a way that what they’re offering is more attractive than anything else available.
Entrepreneurs are a national treasure, and should be protected, nourished, encouraged and rewarded as much as possible. They create all wealth, all jobs, all opportunities, and all prosperity in the nation. They’re the most important people in a market economy–and there are never enough of them.
As an entrepreneur, you are extremely important to your world. Your success is vital to the success of the nation. To help you develop a better business, one that contributes to the health of the economy, I’m going to suggest that you take some time to sit down, answer the following questions, and implement the following actions:
What opportunities exist today for you to create or bring new products or services to your market that people want, need and are willing to pay for? What are your three best opportunities?
- Identify the steps you could take immediately to operate your business more efficiently, especially regarding internal operating systems.
- Tell yourself continually “Failure is not an option.” Be willing to move out of your comfort zone, to take risks if necessary to build your business.
- Use your creativity rather than your money to find new, better, cheaper ways to sell your products or reduce your costs of operation. What could you do immediately in one or both of these areas?
- Imagine starting over. Is there anything you’re doing today that, knowing what you now know, you wouldn’t get into or start up again?
- Imagine reinventing your business. If your business burned to the ground today, and you had to start over.