August 25, 2010 Leave a comment
by NEIL PATEL
Are you thinking about starting a business? Well if you are, make sure you avoid these mistakes or else your business is probably going to fail.
1. Slow and steady doesn’t win the race
Most new business fail because they don’t have enough money. If you move slowly, it will take that much longer before you make your first buck. And even if you are already bringing in some cash, that’s not enough… you have to be profitable.
Time isn’t on your side, so do whatever you can to get your business out there and making money. And I know you probably don’t want to cut any corners, but the reality is, you’ll have to cut a lot of corners to survive.
2. Don’t hire too quickly
Doesn’t it sound nice to kick back, relax, and just watch all your employees do all the work for you while the money rolls in? You know you want to do this, so how do you make this dream come true?
Well, it isn’t by hiring people right away. When you are first starting out you are going to have to do more work than you’ll want to.
Hiring is a great idea, but if you don’t understand what the employees job duties are, how they are going to accomplish their tasks, and what roadblocks they are going to face, you’ll just end up hiring employees that don’t meet your expectations.
Before you hire someone for a new position in your company, make sure you first put yourself in their shoes. Once you understand what they are going to go through, you can then hire someone.
3. Emotions and business don’t mix
Let’s face it, you think with your emotions whether you like it or not. And don’t worry, it’s not just you, we all do it.
You are going to have to train yourself to make decisions based off of logic. Even if your emotions are telling you to do something else, you need to make the logical decision.
Emotions don’t mix well with business because they cause you to do whatever will fix your hurt feelings instead of whatever is the best for the business.
4. It doesn’t matter what you want, it’s what the customer wants
Do you have a cool idea for your new business? Maybe it’s a revolutionary product that is going to change the world, or better yet maybe it’s something that you dreamed about creating since you were a child.
I hate to say it, but it doesn’t matter what you want. You should only be doing what your customers want, as they are the ones who are paying you.
So before you invest too much time and money into a cool idea, find out if your customers really want it. You can do it through surveying them and by trying to understand the problems they are facing.
5. There’s nothing wrong with being in the trenches
Being a CEO sounds sexy, but it really isn’t. Being a CEO doesn’t mean that you get to boss people around and tell them what they have to do. It means that you are responsible for the company’s well being.
And the only way you can ensure that the company is going to do well, when you first start out, is by being in the trenches.
You should be taking with customers, understanding their pain points with your product/service, and even deal with customer service issues. By being in the trenches, you’ll be able to determine what steps your business needs to take to hit profitability.
6. Money doesn’t grow on trees
I know, it technically does grow on trees, but you know what I mean. Because capital is the one thing that new businesses lack the most, you have to be cautious with your spending.
Save every penny you can because you never know when you are going to need it. This may mean that you have to pay employees less than they need to survive, or bargain down your supplier’s prices, even though your supplier is your best friend.
Do whatever you can to save a buck. And don’t be shy, because if you never ask you’ll never receive.
7. The best partner is a business partner
There is only so much you can do on your own. And when you are starting out, you won’t have a ton of cash to hire employees.
So how do you get work done without paying people?
You find a business partner! A business partner will not only work harder than most of your employees, but it won’t cost you a dime to get them… well other than equity in your business.
And if you don’t think having a co-founder is worth it, just for a second think of some of the big companies out there. Now think about whom the company was founded by? The chances are, there were at least 2 co-founders.
8. Stop thinking about tomorrow
One big problem that you’ll run into is that you’ll continue to plan for the future. And although it is typically wise to be prepared, as a new company, there isn’t enough time for you to be thinking about next year, next month, or even tomorrow.
Everyday, you should just be working on things that are going to help make the company more profitable. And that’s it! Don’t waste your time planning for the future.
All that matters is that your company has enough cash to survive, and if you don’t work on achieving profitability, you’re going to be closing down your doors.
9. There’s nothing wrong with asking for help
You’re not a jack-of-all-trades. No one is! You’ll always have questions and hopefully you’ll always be learning how to solve them.
So in the mean time, when you are looking for solutions for your questions, make sure you ask other entrepreneurs. There is nothing wrong with having a few mentors that you can rely on for advice.
The best part about it is that most mentors will do this for free… it’s their way of giving back to the entrepreneur community.
So go out there and look for a mentor, because if you think you already have all the answers you need, you’ll be in for a treat.
10. All work and no play will make you a dull boy
If all you are doing is working, you’ll end up getting burned out. You need to take a break and have some fun so that way when you go back in work, you’ll be productive.
And having some fun doesn’t mean that you have to go to an amusement park. It could be spending time with your family or friends… or better, it could be going to networking events.
Networking events are a great place to meet other entrepreneurs, gain some free advice, and maybe you’ll even end up closing some business deals at these events.
The bottom line
Don’t expect miracles with your first business. No matter what, you’ll make some mistakes, but the key to success lies within learning from your mistakes.
Don’t be afraid of the unknown! We all make mistakes, but what separates the great entrepreneurs from the mediocre ones is that the great ones don’t repeat the same mistakes.