If you’re an entrepreneur, chances are that you have failed in at least a couple of business ventures. This can range from trying to sell a product to just running a blog. Failing is part of the learning process – it is said that you learn more from failure than from success – but there are some common mistakes which we can avoid. Rosalind Resnick details the 10 Mistakes That Start-Up Entrepreneurs Make, an article for the Wall Street Journal that we could all benefit from reading.
For the full analysis of the mistakes, follow the link, but here is the summary.
- Working Alone. It’s tempting to want to be a one-person company and take 100% of the earnings, but many times this is just too much to do. Consider putting together a small team of partners whose skills compliment each other.
- Seeking Advice From Too Many People. You need a core group of advisors to help you brainstorm issues, but having too many of them will produce indecision.
- Focusing Too Much on the Product and Not Sales. It doesn’t matter how great your product is, if people don’t know about it, it won’t sell.
- Focusing On Too Small of a Niche. One of the first things we learn is to target a specific niche to be more successful, however there is such a thing as over-targeting. Don’t cut your potential customer base short.
- Entering a Market With No Distribution Partner. Resnick says “It’s easier to break into a market if there’s already a network of agents, brokers, manufacturers’ reps and other third-party resellers ready, willing and able to sell your product into existing distribution channels.”
- Overpaying For Advertisements. Advertising brings in customers, but at what cost? Closely follow your promotional efforts and make sure that when you break down the numbers your cost per customer is still earning you an acceptable profit.
- Insufficient Capital. Besides needing money for rent, equipment, advertising, and product development, remember to calculate costs for salaries, insurance, utilities, and other overhead costs.
- Over-funding. Having too much capital can lead to inefficiency and wasting money – you need to be lean and crafty, so know when you have enough investment to start working.
- Not Developing a Business Plan. This one seems obvious, but before you start to develop a product or market it, you need to have your plan of action – it’s tempting to breeze past this, but you’ll appreciate the knowledge you gain from actually researching the market and writing a plan beforehand. It can save you time and money.
- Over Developing a Business Plan. The Military has a saying – a 70% solution now is better than a 100% solution later, because “later” always changes, which means you’ll constantly be changing your plan. At some point you have to take a leap of faith and actually implement your plan, or it will never become reality.
For those of you who have started businesses, what mistakes have you learned from?