Successful entrepreneurs are those who do not only back up their ideas with research and data, but go further by showing flexibility in changing them, discarding them and pursuing the most viable option. Even if your idea is a brand new one with zero data available, get creative about proxy data that shows some indication for success. I will write about this in more details.
2. Not covering your legal and regulatory bases: “Dude, is your business even legal?” it sounds funny right? But it won’t be once you get sued, fined, shutdown, or worst case scenario, when you face gross negligence or criminal charges. Are there regulatory restrictions that will prevent your business from operating as intended? What are the legal and regulatory risks associated with your business and how can you mitigate them? Are there specific consumer protections laws your business should abide by? If so, how should they be reflected in your contracts? These basic questions should be answered first before you even start drafting your business plan.
3. The employee mindset: Getting a job is about being paid to fulfill a specific mandate, task, project at least for most people. You may get lucky and actually have a job that you also enjoy. As a business owner, you do not have the luxury to collect a recurrent paycheck to do something finite you have to be willing to constantly learn and be uncomfortable. You need to adjust your mindset and commit to work on your business, not simply in it, before defining tasks or delegating them on anyone else.
4. No prior apprenticeship: It is one thing to be great at making art, but it is something completely different to actually run an art gallery. Sometimes taking a job in the industry one wants to thrive in is the first critical step. Get a showroom, sales, or a managerial role at your future competition and pay close attention to the success factors and gaps they are unaware of.
5. The fear of being alone: It will not help you in relationships; it may be the end of you in business. Yes, it worked “some people” but do you really want to take the chance? Do not get a partner for comfort and give up equity to someone who do not have any skin in the game or who have not clearly demonstrated his or her value or commitment to your business. Do not confuse “partners” with “resources” or “supporters This is a topic I want to write more about in the future.
6. Thinking it is all about your product: This comes as a surprise to many. You think if you have a great product or your service is unbeatable, you have a business. Not! It is your brand, your back-office resources, your supporters/customers and their own desires/agendas that make the product successful. This is also true in the not-for-profit area. You may still make the mistake to think you are selling tickets to a fundraising gala but that is not what your attendees are buying into.
7. Thinking it is all about the price: Sustainability in about so much more than your product pricing. It is about making a profit! Many new entrepreneurs will refuse to admit they do not know the difference. That is a big topic to be discussed in details. For the sake of simplicity, know that revenue is the income generated from sale of goods or services based on the sales price. A profit is the money you have left after covering all the costs involved to generate that revenue including cost of good sold, salaries and taxes. Pick smaller revenues with larger profit margins by managing costs and using business processes accelerators.
8. Did I mention managing costs? Let me clarify: do not cut your way to success. Invest what is necessary to bring in new business; do not save a few pennies on quality or marketing or by short-changing employees and contractors.
9. Hiring cheap: You get what you pay for. It is best to wait until your revenues allows to skillful resources. Hiring the wrong employee will ruin your reputation and deter repeat business among many other disasters.
10. Not measuring anything: You must know your numbers as you cannot control what do you do not know, and most importantly, you cannot learn from it to continue growing your business by getting investors to buy into your story. This goes beyond basic accounting requirements. Develop operational and other success measures from day 1 including customers, referral sources, costs on inputs.
What mistakes have made (and learnt from) as a new entrepreneur? Share them with us. Disagree with any of the points above? Let me know!
