By Rosemary Plorin
By some measures, there’s never been a better time to start a business. Whether you’re starting a business in the hottest industries around or taking an incremental approach to your lifelong passion, there are plenty of tailwinds working in your favor.
Interest rates are still low, so capital is cheap. Though the labor market has tightened somewhat, wage growth is subdued, so labor costs – particularly for non-executive salaries, are fairly manageable. Smart cities and states are falling over each other to offer tax breaks and fiscal incentives to new or relocating businesses. And consumers are reaping the financial rewards of the lowest gas prices in more than a decade, meaning they have more cash to spend.
In short, it’s a favorable environment for many budding entrepreneurs. (Well, it feels that way, at least. Things can always be better.)
A favorable entrepreneurial climate doesn’t mean all pain and no gain for entrepreneurs themselves, though. On the contrary: Starting a business is a major challenge in any economic environment. The first few years of any company’s existence are a veritable minefield, replete with pitfalls that can spell disaster (or at least a serious setback) for business fortunes. If you’d like to traverse this “danger zone” and escape with your company (and life savings) intact, make sure to avoid these 10 common rookie mistakes.
1. Trying Too Hard to Sell Yourself, Not Your Product
Reality check: Investors, customers, and even prospective employees don’t necessarily care about you. They care about your product or service — and your ability to deliver and improve it. Many entrepreneurs find it hard to suppress their egos and admit this. The sooner you turn your focus to selling your product, not yourself, the sooner you’ll find the traction you always knew was right around the corner.
2. Trading Time for Money
What’s more valuable: time or money? Most people assume the latter. But, for entrepreneurs, time is very much the prime variable. Whenever you’re presented with (or create) an opportunity to save time without compromising quality, take it. Saved time is scaled time — and that’s great for your bottom line.
3. Making the Perfect the Enemy of the Good
Whether it’s actually true that Thomas Edison failed 10,000 times before his first success, the moral here is clear: If you don’t try, you won’t succeed — no matter how many attempts it takes. If you tinker with an idea until it’s absolutely perfect, someone else may beat you to market with a good facsimile.
4. Skipping Market-Testing
This is a walk-before-you-run type deal. If you don’t do your due diligence on your target audience, you could set yourself up for a huge belly flop when it comes time to release your product or service. That’s not just humiliating. It’s also very, very costly.
5. Playing the Waiting Game
Successful entrepreneurs know they can’t expect opportunity to fall into their laps. They need to create opportunity. They also know how to be opportunistic and seize the day – even if that day comes unexpectedly. Put another way: if you sit around waiting for the “right moment,” whatever that means, you’re likely to be disappointed.
6. Failing to Secure Your IP
Whether your business is built on a black-box process or a simple product, it’s ultimately dependent on intellectual property. Before you take your idea to market or even real its details to investors, do a thorough patent search and, if you’re not stepping on anyone else’s toes, apply for a patent of your own.
7. Trying to Do It All Yourself
When you’re in startup mode, it’s entirely possible that “you” and “your company” will be one and the same. But as soon as conditions allow, you need to delegate and scale — even if that means working with a rotating cast of contractors or tapping the internship markets for some free labor. Remember that you’re the CEO: try to focus on strategic matters and business growth (not buying supplies and going to the post office every day – if you can avoid it.
8. Going to Market Before You’re Properly Capitalized
You might not have a rich uncle, but that shouldn’t stop you from finding the funding you need. If your idea is compelling, pull out all the stops: crowdfunding, angels, traditional banks, credit cards, you name it. Just don’t go to market before you’ve got enough dough to make a real go of it.
9. Straying from Your Wheelhouse
If you’re not comfortable with the rules, you probably shouldn’t play the game. Translation: stick to what you’re good at, and if you’re not good at whatever your company is supposed to do, hire someone who is.
10. Suppressing Your Sense of Urgency
There’s no better time like the present. Strike while the iron’s hot. Make the most of today.
Whichever metaphor you prefer, the point is obvious: Urgency beats complacency any day of the week. Successful business owners aren’t satisfied when things are going “good” or “fine.” They want things to go great — and get better.
And One Important “Do”
A long list of “do nots” can seem a bit preachy. We all make mistakes, after all. Surely one or two rookie errors from a first time entrepreneur won’t upend a lifetime of ambition?
That’s probably true. Ultimately, the most important rule that any business owner can follow — far more important than any single “don’t” on this list — is an uplifting, affirmative one: Believe in yourself. You may not have all the answers — but, if you have belief, you’ll go farther than you ever thought possible.
Any do’s or don’ts to share from your own experience?