I’ve made them. People smarter than me have made them. Many companies that make these mistakes never recover. The ones that do face a long and taxing road to redemption. Because these seven mistakes are easy to make, it is vital for entrepreneurs to know what they are, why they are so dangerous, and exactly how to avoid them. This article with tell you precisely what you need to know.
No. 7 Start-Up Sin: Conformity
Today’s consumer is more discriminating than ever. People want to do business with companies and products that are original, unique, even raw. To most of us, personality is more important than polish. It doesn’t take a marketing expert to spot a stock photo, generic logo, or template website. If your business image comes across as similar to your competition or overly professional, you risk being perceived as boring.To avoid this snare, focus on what makes you truly unique. Wear your individuality proudly. Show people something they’ve never seen before. In the words of American scholar Ralph Waldo Emerson, “Do not follow where the path may lead. Go, instead, where there is no path and leave a trail.”
No. 6 Start-Up Sin: Misdirection
It is a common tendency of new entrepreneurs to focus on product over people. To be successful in the long-run though, you must break away from this tendency. Relationships are what drives business forward. You time should be split between product development and client relationship development. Be an educator, consultant, and friend to your clients. In so doing, you will ensure that they become clients for life. The more time you invest in your customers now, the more money they will invest in your business later.
No. 5 Start-Up Sin: Autonomy
Are you a genius in your field? Do people say you are? Do you think you are? Let’s be honest here. It’s the reason you started your own company — you can do it better, faster or cheaper than someone else. Here’s the kicker though: You can’t do everything alone.In the early stages of start-up life, you will likely carry much of the workload. You may do all the writing, coding, hiring, firing, marketing, selling, and toilet cleaning. If you do this long enough, you could get to a point where you are comfortable doing everything. Don’t.
Humbly acknowledge that the collective intelligence, skill, and energy can accomplish more than you can on your own. If you start feeling too self-reliant, force yourself to remember that you need the support of others if you are going to reach your goals.
No.4 Start-Up Sin: Complacency
When your start-up venture has its first encounter with success, perhaps receiving some large orders or inking a sizable contract, the experience can be exhilarating. A sense of relief usually comes along too, as if all the sleepless nights, empty stomachs, and battle scars have finally paid off. While it’s good to celebrate such successes, too much celebrating can make you complacent.When you’re trying to build a long-lasting and profitable enterprise, it is critical that you keep driving forward and setting new goals regardless of what momentary success comes your way. Continue to invest in research, product development and marketing in spite of whether doing so appears necessary at the time. In this way, you can avoid many of the ups and downs that start-ups tend to experience.
No. 3 Start-Up Sin: Naivety
Being an entrepreneur doesn’t endow you with special business sense. In fact, most entrepreneurs start out knowing very little about how to operate a business successfully.The good news is that your inexperience doesn’t have to work against you if you account for it when making decisions. Hire skilled legal counsel before entering into critical business relationships. Select appropriate insurance coverage. Choose your investors wisely and make sure you understand what their ownership interest will cost you. Resist your urge to make snap decisions and consult with a trusted mentor when possible. Protect yourself and your investment. It’s your company after all. Don’t let someone take it from you.
No. 2 Start-Up Sin: Nepotism
Take a good look at the people who work for you. If your workforce consists strictly of friends and family, you may be guilty of Start-Up Sin No. 2.There is nothing wrong with hiring close acquaintances and in some instances your personal network may include people who have the skills you need to build a strong organization. However, if you’re honest with yourself, you’ll probably have to admit that Uncle Bernie isn’t the best accountant in the world.
If you do happen to know the perfect A-player from your own clan, be sure to treat him exactly as you would any other candidate. Clearly define all the roles and responsibilities of the position in advance. Discuss compensation and put the details in writing. Agree on how both parties will exit the relationship if it doesn’t work out. Under no circumstances should you hire friends or family just because you feel sorry for them or you feel obligated to do so.
No. 1 Start-Up Sin: Extravagance
Studies repeatedly show that the chief struggle among business owners involves learning to balance their spending with available revenue. Underestimating monthly expenses, overestimating projections, taking on too much overhead, and hiring too quickly are among the most common foibles.If you are a visionary it is understandable that you have big plans for your company. But remember, businesses need budgets in the same way households need budgets. Even if you happen to be particularly prosperous or are blessed with consistent revenue, draft a conservative budget and save for a rainy day. Take advantage of high interest checking and savings accounts. And most of all, when making purchasing decisions, remember that every dollar you don’t spend is an extra dollar you earn.
If this article has left you questioning some of your recent decisions, don’t worry, you’re in good company. Every mistake on this list earned its place there because generations of entrepreneurs made them before you. In business, as in life, success never comes without its share of failures. Going forward though, you have something those entrepreneurs didn’t have –foresight. Use this advance knowledge to help you avoid these seven startup sins, and your business will survive to make its mark on the world.
Robert Sofia is a nationally recognized author, award winning public speaker, and financial industry thought leader. He has developed marketing strategies for Fortune 500® companies, personally coaches hundreds of financial advisors nationwide, and is the C.O.O and cofounder of Platinum Advisor Marketing Strategies.
The Young Entrepreneur Council (Y.E.C.) provides its members with access to tools, mentoring, community and educational resources that support each stage of their business’s development and growth. Our organization promotes entrepreneurship as a solution to youth unemployment and underemployment.