7 Critical Mistakes Entrepreneurs Wish They Knew Before Starting a Business
Posted on March 13, 2017
Hey, everyone makes mistakes.
The road to entrepreneurship success does not come without great challenges along the way. It is a long journey that no business school classes or lectures could prepare you for. Each and every person who has made it amongst those in entrepreneurship fame has overcome their fair share of adversities.
There are surprising twists and turns to this path, there are hidden gems along the way, and even still – there are mistakes to be made and lessons to be learned.
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In an attempt to make certain you can hit the ground running with your business and make this your most epic launch yet, we’ve gathered three key mistakes turned lessons that we experienced firsthand, and laid out a few ways to ensure you don’t make the same mistakes.
#1 Consider Your Options – Especially with Funding and Employees.
Partners, finances, employees, processes – when it comes down to each integral part of your organization’s structure, it is imperative to consider all options.
Often times we find ourselves in a hurried state because of the huge growth opportunities readily accessible in entrepreneurship today, and neglect to give all of our projects or commitments the adequate research they deserve.
When getting started with a past business venture, a colleague of mine decided they were expanding so rapidly it seemed they needed to expand the office space. So, it was time to invest in commercial property space for the team. The spot was found that could house the team and provide the resources needed to continue this monumental growth. However in doing so, there were no options considered. Later there was a more cost effective solution to renting, and it would have saved $10,000.
It is important in planning how to successfully fund your business or how to successful fund your startup that you make distinct plans to cover these costs.
The obvious choice to funding a business is with cash. If at all possible you would avoid those heavy fees associated with loans. Often it can occur that our investors become overbearing and attempt to do their CEOs job for them.
This sort of relationship is the epitome of what you don’t want in upper management – micromanaging and overplaying the other party’s role.
During the hiring process, it is important to avoid “going with your gut”. There will instances where you wish to hire with your heart and not your head, ignore those impulses and determine who your best candidate is with an objective approach.
Match your organization’s vision and mission with those of your candidates’ and you can be certain to avoid many hiring mistakes. Furthermore, if you can determine the candidate’s “why” for applying for this position, you can weed out some of the weaker candidates in favor for those who will remain committed and passionate.
Here is a summary of some of the reason’s people are influenced into their career roles.
How to avoid this mistake.
When you think you’ve considered EVERYTHING, look back at it one more time and see if there’s another approach that maybe you wouldn’t usually take that might yield different (not better, not worse) outcomes – then weigh those options against your standards. When making a huge decision, whether it be hiring a new marketing manager or leasing that downtown office space, wait 24 hours and sleep on it. The fresh perspective tomorrow morning could bring to light a plethora of options yet to be considered.
#2 Keep track of the small stuff.
It is so easy to get lost in the day-to-day and neglect accurate record keeping. Many entrepreneurs have much more important tasks than updating excel documents, important and exporting balance sheets, and updating inventory every week.
While it is important NOT to sweat the small stuff, it is equally important to BE AWARE of that small stuff.
Those small costs that don’t seem too important might not be – can add up and quickly become a nuisance. Keeping accurate records and make sure you’re documenting all of it.
One entrepreneur over at Art Works Studio & Classroom recalls when she first took the reins and started running the art studio. With taking over this business and the opening of a new location in Hollywood, owner Cyndi Finkel recalls getting lost in the business.
“I had to stop running my business and building my brand to play catch-up, get a bookkeeper on board, and get balance sheets in order.”
How to avoid this mistake.
Keep good records. And if you can’t, hire someone who can.
Seems simple enough, so why doesn’t everybody do it? Well, the task can become tedious and seem unimportant compared to many other aspects of running your business so it may become essential to bring on an additional member to your team. This person should be honest, analytical, and accountable by all means. You are trusting your business’ livelihood in their hands, make sure this is the right person for the job.
#3 Not seeing the opportunity in each mistake.
When you break it down, each mistake is an opportunity to teach yourself a lesson.
The lesson may be as small and simple as standardizing your process for next time, the lesson may be your resilience towards not giving up after the first three tries, or that lesson may just simply be better scheduling or keeping better track of your calendar – but whatever the lesson, be sure to learn it from the first mistake.
In an interview with Inc magazine, Keith Roberts, President and Founder of Zenman, said that when the recession hit his company in 2009, they experienced some financial difficulties. Keith ended up personally funding the entire company for several months.
While his company struggled to stay afloat, Keith considered laying off part of his team. He decided against it because he thought laying off people would be the worst thing for team morale.
Now he looks back on those events and had this to say, “I thought laying people off would lead to bad morale, but it was actually the opposite. I now know that having the right people in the right seats – and letting go of those who don’t fit is the best strategy.
Bigger isn’t always better, and to me, it’s better to grow sustainably while providing security for our team. It took me failing to realize this.” Don’t be afraid to fail or else you may be missing out on some very powerful lessons.
According to Entrepreneur.com, each mistake has six different sizes:
The size of the mistake itself – usually nothing serious.
The size of the consequences if the mistake is not found and corrected – this can be huge!
The size of the time and cost it will take to fix the mistake.
The size of the causes/faults of the mistake.
The size of the effort to ensure this mistake doesn’t occur again.
The size of the benefits from ensuring this mistake doesn’t happen again.
As you can see, each little mistake that is made can cost some serious time and money. That’s why it is so important for entrepreneurs to learn a lesson from every mistake. How can an entrepreneur learn from their mistakes? The answer is simple – don’t repeat them. Each mistake is an opportunity to correct your processes and streamline towards better all-around operations.
How to avoid this mistake.
Take your time. The world may seem like it is moving a million miles per hour, but rest assured the world is moving just as quickly right now as it is when you’re in the waiting room at your local doctor’s office. There is an art in making mistakes and there is education hidden in each fallacy. We’re all human beings so we are all going to make mistakes. You will make a great number of mistakes in your entrepreneurial journey, it’s almost essential to success, however you must ensure you learn from each mistake you make and don’t allow those same mistakes to further harm your progress in the future.
#4 Waiting too long to launch.
We’ve all been there. Working tirelessly, iteration and iteration, on perfecting our beautiful baby business before we send her out into the big, scary live world.
For some, it’s another story – they just can’t make the time to start their podcast or courses, some people are waiting for their ideal number of follower, and some completely talk themselves out of it by convincing themselves no one will buy it. We have to find that time.
Whatever the case, this disease has been detrimental to a great number of successful and unsuccessful individuals.
Reid Hoffman, founder of LinkedIn said,
“If you are not embarrassed by the first version of your product, you’ve launched too late.”
So when is the right time to launch?
It’s tough. But the answer is ASAP. The sooner you launch your product/service, the sooner you can start building towards that sustainable and recurring income you had dreamed of creating.
This business philosophy has been coined by Business Insider reporter Nick Saint as the “Iterate Fast and Release Often” movement.
Essentially, to be good at product launches one must get experience with product launches. The experienced professional has practice building anticipation and excitement towards a launch – and the only way to learn how to have a successful product launch is by completing a few product launches of your own.
Don’t be afraid to start out small. Almost everyone’s first product launch sucks, and it’s okay!
#5 Choosing a product/service that you’re not passionate about.
In today’s ever populated startup world, there is an opportunity to introduce just about anything you want to business. If you want to add speakers and a cutting board to a cooler, there’s a Kickstarter for that.
If you want to sit at home drink tea and write online blogs all day, there’s a blog for that.
We must all ask ourselves the most important question we will ever ask ourselves, “What do you want to do?”
Too often, entrepreneurs are latching on to a vision that they feel will serve a large audience when the focus should be on what makes them, the entrepreneurs, enthused and passionate.
Whatever market you intend on joining, there will be others there waiting who may care more about that market than you. If their passion and enthusiasm are stronger than ours, we will lag behind and eventually lose the competition.
How to avoid this mistake.
Pick a passion! Your business doesn’t have to be the end all, be all passion of your life, and that would be challenging considering a number of us have more than one huge passion in our lives. But, choose something that gives you a little hunger for more. If you really desire more from your product or service, energy will be bountiful.
#6 Having unrealistic expectations
Sometimes we’ve got to go with the flow. To enter into a fresh new marketplace and expect arbitrary benchmarks to be set is to enter your company into a mountain of odds stacked against them.Yes, the Facebooks of the world are out there and there will be more like them, but to say that you are the next multi-million user growth unicorn on the world wide web is to invite ourselves into a startling reality check. There’s really no telling who will be next on this train of monumental success, but there is solace in setting more realistic expectations and adapting those benchmarks to these markets.
Yes, the Facebooks of the world are out there and there will be more like them, but to say that you are the next multi-million user growth unicorn on the world wide web is to invite ourselves into a startling reality check. There’s really no telling who will be next on this train of monumental success, but there is solace in setting realistic expectations and adapting those benchmarks to these markets.
If these ideals of success measured in user count or dollars generated can be laid out in week and months, you’re probably already falling into this trap.
If you plan to utilize a four-hour workweek, work a part time or full-time job, travel, start up more than one business venture at a time, you’re probably already falling for this ruse.
How to avoid this mistake.
Seriously, this one is hard to avoid! Know that his is going to be hard work. Know that your goals, your business, and your vision may not begin to culminate for over a full year – and maybe even longer. Know that your benchmarks may change, know that your timeframes may change. Become comfortable with change, because that is the only way you will make it from zero to one.
Talk with some other entrepreneurs who have made it. Ask them what it took. Ask them their timelines. Ask them if their actual timelines met up with their perceived timelines. Ask them what it really took to make it. They’ll have more for you than you can imagine, and you might even find yourself a mentor for this journey.
#7 Doing it alone
Too many entrepreneurs try and go at this tough and tiring journey on their own and not enough utilize the incredible benefits that come along with a team. Delegation is an art form that the true conquerors of business have mastered. Luckily, Richard Bransoned shared his story on learning to delegate in an interview with Entrepreneur.com
Solopreneurs are entrepreneurs who are trying to attack this startup venture all by themselves. No one can succeed in business alone, everyone needs someone to hold them accountable and provide a backboard to guide. Support systems can make the impossible done effortlessly.
A struggle is built between yourself and the relentless battle of keeping your business afloat. You’ll face challenges school and teachers could never have prepared us for. It helps to have some other entrepreneurs with us along the way – maybe they’ve already faced these same problems. Maybe they have some answers for you.
How to avoid this mistake.
Get connected. Build a team. Find your support system.
There are others out there just like you and I. There are others on their entrepreneurial journey looking for guidance and help along the way.
Find a way to connect with them and share your problems and worries. You may share similar struggles. You might find you aren’t the only one having this certain business issue.
There are aspects of your business that will not be your forte. For these, and other, smaller parts, it can be extremely beneficial to delegate these tasks to others on the team.
Michael Hyatt started out delegating tasks by hiring a personal assistant at 5 hours a week. This allowed him to avoid some of the most tedious tasks and maintain that passion that urged him to launch this business.
At the end of the day, we have to realize everyone is on a constant struggle to learn and perfect. Through the long trusted practice of trial and error, all things eventually become known. Be patient with yourself. Still today we’re all learning. If you haven’t made any real mistakes you have robbed yourself of the opportunity to have learned real lessons. Allow yourself time to grow. Forgive yourself when mistakes are made – but DO NOT REPEAT YOUR MISTAKES. Do yourself a huge favor and learn that lesson right then and there. I repeat, do not make that same mistake twice. Give your future self the benefit of learning from that experience and not the disservice of continued harm towards your operation.
Has something to add to this story? Leave your remarks in the comments section – we’d love to hear from you!