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5 Mistakes to Avoid When Starting a Business

Entrepreneurship in the real sense of the word is truly something wonderful, if you have a stomach for it, that is. All the risks and uncertainty associate with entrepreneurship makes it unsuitable for faint hearted. If you’re thinking about embarking on an entrepreneurial journey but are unsure whether you’re cut out for it and have what it takes to succeed as an entrepreneur, perhaps it’s time you do the self-SWOT analysis and figure out for yourself.

Entrepreneurship in the real sense of the word is truly something wonderful, if you have a stomach for it, that is. All the risks and uncertainty associate with entrepreneurship makes it unsuitable for faint hearted. If you’re thinking about embarking on an entrepreneurial journey but are unsure whether you’re cut out for it and have what it takes to succeed as an entrepreneur, perhaps it’s time you do the self-SWOT analysis and figure out for yourself. The last thing you want to do is embark on an entrepreneurial journey and fall flat on your face because you aren’t cut out for it. If the result of your self-SWOT analysis is favorable and you’ve got what it takes to make it and make it big, avoid the following mistakes at all cost.

1.     Start a business for all the wrong reasons

We live in the most exciting times in the history of mankind. Advancements in transpiration, communication and technology over the past two decades have led to creation of a new phenomenon called globalization which has in turn leveled the playing field and made it easier than ever for entrepreneurs to turn their dreams into reality. 

This doesn’t mean that you should start a business simply because everyone else is doing it or to keep up with you college pal who’s killing it with his food delivery mobile app. Another reason you must never start a business for is to become rich, this one in particular is bad for it is a surefire way to fail. Instead, find unmet need and fill it, right a wrong or come up with a BIG why, something truly worthwhile which will give you STAYING POWER to whether the storms and overcome various obstacles you’re bound to encounter on your entrepreneurial journey.    

2.     Pick the wrong partner

Old adage says “partner can either make you or break you” and for a good reason, it is very true. Business partnership is much like marriage – for those of you who are married you’ll know exactly what I mean – in that if any one of the partners is wrong for that partnership and doesn’t contribute to the common goal and performs actions or duties which are conducive to the overall success, your business, like marriage, will be in trouble and possibly fail. Therefore, in the absence of an adequate partner you are much better off to go it alone. Beware though, going it alone isn’t easy, far from it but it has its merit too.

So how do you know if the partner you have in mind is the right one for your business? The answer is you don’t and can’t never know with certainty, even if that’s someone you’ve known your whole life and have a close-knit relationship with on a personal level. The good news is that there are signs that a person is a good fit to be your partner in business. For example, you share a common values and aspiration, have similar work ethics and complementing skills which are conducive to your business success e.g. technical and business for an online tech business etc. you get the point.

In addition to being able to rely upon and feed of each other,  the total sum of you and your partner must exceed 2, many times over. Also, look for someone who is candid, passionate and  willing to question everything in search of an optimal outcome, this way you’ll ensure you don’t fall prey to a ‘groupthink’ phenomenon which helps no one. 

3.     Get Angels and VCs on board too soon

Starting a business is very often associated with much money which many people – or rather naysayers – use as an excuse, among many others, to justify their inability to pursue their dreams. Money is essential part of business, much like an idea, determination, staying power, good timing etc. but the lack of it is far from the showstopper, for there’s plenty of money available on the side lines to be tapped into when the time is right. Unless you’re starting a capital-intensive business e.g. telecommunication, manufacturing, airlines etc. you can bootstrap for a long time, perhaps until profitability and self-sustainability in the case of professional service business e.g. consultancy, web development, blogging etc. or until you need an injection of capital. 

Of many perks you get as a business owner, freedom is one of the most precious. As a business owner you are completely in charge of your business and have no one to answer to, no boss or a board, it’s just you and your partner(s) in case of partnership. Naturally, all the responsibility sits with you and it’s you who is celebrated in case of a success and blamed in case of failure. You envision, create and execute your business strategy in accordance with your beliefs. The moment you succumb to external funding, be it from Angel or Venture Capital investor, your freedom and founder privileges fly out the window.

All of a sudden there’s someone you have got to explain your every thought, decision or a move related to your business – in some cases, depending on the size of the investment – you will have to do more than explain yourself, you’ll have to seek approvals for certain actions you want to take. Freedom is an expensive price to pay for external funding, so unless you absolutely need additional funds to help you run your business, don’t raise it. When and if you do, take only what you need to get to where you need to be and thereafter, if you need additional funds do it over again. Whatever you do, never take more money than you need at any given time for it could completely ruin you and your business. 

4.     Be rigid and inflexible

The very first lesson on business planning and forecasting should be that no business plan ever survives the first contact with customers or the marketplace. No matter how good, well thought out or meticulously researched and written, chances are that your business plan will collapse as soon as you launch your business venture. Forecasting is called guesstimating for a reason, it’s the guessing game at best, no one – I don’t care what business school they went to or how many years of professional experience they may have – can know for sure what your target audience will want 3 years from now and how much will they be willing to pay for it. You can only make a well-informed guess. 

With that in mind, you should look at the business plan for what it is, a tool to keep you focused and on track to where you need to get. Be sure to keep an open mind and be completely flexible and open to change, tweaks and pivot. You’ve got to employ the feedback loop into your modus operandi and use your prospects and clients as the source of improvement. Your biggest critics should be your most valuable assets in the early going so embrace them but not blindly – use your common sense and open mind when evaluating their feedbacks and criticisms. Don’t sell out, stay truthful to your values, beliefs and aspirations. 

5.     Think or worry about the competition

Competition in any one business should serve only two purposes: one, as acknowledgement that what you’re getting into is really in demand – there’s a real market need for it, which should only encourage and motivate you; two, benchmark or a measuring stick – you should use your competition to compare against and know how well your startup is doing, progressing and advancing at any given time. This in essence could be your driving force on your way to the top. So worry not about the competition but embrace it.

 

Did you find this post useful and what are your thoughts on starting a business? Get in touch with me via Twitter or Parttimerz

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