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To err is human. To do the same thing repeatedly and expect different results is insanity. And to learn from the mistakes of others is a good way to improve your odds.
Here are ten major mistakes, inspired by a recent Wall Street Journal article (link below):
1. Going it Alone. Forget the solo entrepreneur fantasy. Successful businesses are built on partnerships. No one person is smart enough, or self-aware enough, to know it all. Leave room in your business plan for other people.
2. Asking too Many People for Advice. Seek out advice, but don’t go overboard asking everyone. Create a small advisory group. Then keep them in the loop, so they’ll be there when you really need them.
3. Spending Too Much Time on Product Development, Not Enough on Sales. While every business needs a good product, eventually you have to sell what you’ve got, and make improvements later. Don’t let the “perfect become the enemy of the good.”
4. Targeting Too Small a Market. A clear focus with a well-defined market niche is a hallmark of many solid business plans. That said, keep your options (and your eyes) open to a larger market to expand into as circumstances allow.
5. Entering a Market With No Distribution Partner. Finding customers is not easy for a startup, so do your homework to identify and test your ability to tap into existing networks and referral markets.
6. Overpaying for Customers. Don’t spend more money acquiring customers than you will profit from your relationship with them. How do you know? Do market research, then do your own testing.
7. Raising Too Little Capital. Undercapitalization is a big problem. Sometimes it comes from believing that starving your business early will lead to greater future success. Frugality is one thing; not being able to meet payroll is another.
8. Raising Too Much Capital. Can be just as destructive as not enough money. Remember the dot com boom-bust era?
9. Not Having A Business Plan. Can’t say that enough times.
10. Over-thinking Your Business Plan. No business plan can eliminate risk. Starting a business requires a leap of faith.
Mistakes happen. Success comes to those who learn quickly from their mistakes, and from the mistakes of others.
Here’s the WSJ article: http://online.wsj.com/article/SB10001424052748703467004575463460389523660.html
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For more resources, see our Library topic Business Planning.
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