What Are The Most Common Mistakes First-Time Entrepreneurs Make?
“Insanity is doing the same thing over and over again but expecting different results.”
Is your business battling to stay about the water? Are you planning to start your very own business? Did your business take some hard knocks that brought it down? Here is the summary of the most common mistakes that entrepreneurs submitted on Quora by over 3,900 followers. By learning from them you can avoid disasters and put your business back on track. Enjoy the fruits of your labour.
Start Your Business When You Are Broke
The number one rule is ‘Don’t start a company if you’re broke.’ This is different from having no money. If your daily basic needs are covered and you have no money, you are not broke. You have food and shelter. But if you have kids and a wife and bills to be paid, and you have no money, then you are broke. This is the worst time to start a business.
Stupid Ideas
We all have blind spots. That’s why your ideas are great ideas. It’s hard to admit that they won’t work unless you involve a third party. The best proof of a great business idea is profits. That’s the best way you can tell you have a good idea. And do not confuse revenues and profits. You can receive huge revenues and still make a loss.
Over-Promise And Under-Deliver
Because you want to enter the market, there is a tendency to promise heaven to the prospective customers. However after the first experience check if your clients come back for more or refer others to you. In simple terms do not give crap service.
Don’t Communicate With Clients
Follow up on your client and check on them. As soon as you meet a potential customer, have an entire system in place to follow up. As soon as you deliver a proposal, follow up, as soon as you deliver a product, follow up. Even when you are in the middle of completing a project, follow up.
You call and just say, “I always want to make sure I’m doing my best for you. Is all ok?” And then listen. And then say good-bye so you don’t waste their time. Do that and you have a client for life.
Hiring People (Especially Family Members)
Most start-ups don’t need to hire that many people. It exciting to have a crowd around you, but if that crowd is sucking money out your business in return for nothing, then think again. Once you hire someone make them earn their money. Beware of hiring fiends or relative who you won’t be able to fire easily, otherwise you will be running a charity organisation. If you find yourself with low or no sales and you have people playing solitaire in the office, then think again.
Clear Roles
The more clear the roles and instructions, the more productive the team. Clear roles and responsibilities get rid of office politics and strife. Avoid ambiguous positions. Make it simple. Make the structure simple. Do not hope that people will ‘figure it out.’
Don’t Test
If you have a product idea, and you love it, and all your friends tell you it is great, don’t forget to test it. It is the market that has the final say not your friends. And remember your friend and families always lie to you so as not to discourage you. If nobody likes your idea, then you have a bad idea. If a lot of people like it, then it’s a great idea. Good entrepreneurs are risk-adverse. Before you risk, test. Before you leave your job, have customers. Before you hire people, have money in the bank. Before you even create you product, test it. Smart people test. Smart people don’t take stupid risks.
Get Real Advice
They said that ‘the best friend is the one who has the courage to tell you that your baby is ugly.’ If you are not brutally honest with yourself, you can’t make informed decisions that will truly improve your business. You will hide behind excuses and spin stories to yourself explaining away why you have to keep doing the rest of the things on the list. You need a healthy dose of scepticism (not the same as self-doubt or lack of self-belief) to make real forward progress.
Stop Counting Your Eggs Before They Hatch.
If an investor has expressed interest in investing but has not called back in a few weeks that is not money in the bank. A potential customer who says he may pay if your product did such-and-such is not money in the bank. Do not over-value potential.
Stop Trying To Get Around Paying Service Providers
If you owe someone, simply pay on time. If you don’t they will come after you and suck your time and energy. You cannot afford to build a business and at the same time be an expert in ducking creditors.
Stop Pretending To Be Superman
Do not mix up confidence and arrogance. A leader doesn’t need to be perfect. Don’t pretend that everything is always fine and that you never make mistakes. You might think it makes you look strong and brave, or makes people look up to you. You don’t have to flaunt your failures, but hiding them is unnecessary too. Just talk about them honestly and ask people how they think you could improve.
Stop Being So Secretive About Your Idea
You may be scared someone will steal your idea. Don’t. Such a beginner mistake, not even an amateur mistake, it is just a total rookie mistake! You will never find product-market fit by keeping your idea secret until it is perfect. You need to talk about your idea to a lot of people. Because honestly, your idea probably sucks just as much as you are secretly afraid it might. One of the reasons many founders are so secretive about their ideas is because they don’t want to be told it is a stupid idea. This is just denial. Don’t be in denial. Anyhow, the people you are so afraid will steal your idea are too busy working on their own big ideas to steal yours.
Stop Falling In Love With Your Idea Before Product-Market Fit
The more confident an early stage start up founder is, the more concerned I am for them. Of course they can’t just go around telling people they are scared to death all the time. But when you are an early stage founder and really in love with what you built, you will never seek the changes necessary to really make your product great.
Stop Using Your Lack Of Funding As An Excuse
There are many things you can do without funds. Many founders cover up their laziness and weakness using ‘lack of funds.’ You do not need funds to be smart. You do not need funds to be outstanding. You need to be creative. Richard Branson built a billion dollar business without venture capital. You are making up excuses, go find solutions.
Fired Too Slow
If someone promised in the interview to deliver the finished product in three months and you find the system still not running 12 months later, it means it’s you who has a leadership problem. You have lost time, the work has not been done, your client is not happy and you are losing your reputation by creating your business identity as a ‘crap company.’ Get rid of time wasters as soon as possible. Besides digging a financial hole for you, they also spoil your good employees. In a big company, having a team of 30 with some folks not holding their own is fine, perhaps. In a young, fast growing tech company, it’s unacceptable. Each individual’s effort is critical.
Took Rejection Too Personally
If you do not make it first time, ‘try, try, try again.’ If you lose a customers keep moving do not focus on the loss. Find out how to do better next time. Remember opportunities always come.
Get An Office Too Soon
Do you really need that fancy office? Is it to have a good company image or to make yourself feel good? Working from home save you rental costs.
Wasted Time “Networking”
Do not waste time with everyone who asks to have coffee with you in the name of ‘networking.’ Honestly in many cases the time you spend is not worth the conversation that goes on. Before a meeting with these potential clients/partners ask for an agenda and clear objectives for the meeting so that it is clear there is a reason to meet. Some people may not like you for that, but remember your charge out rate per hour that you have saved. Conversations with people who have a clear reason to meet are more mutually productive.
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