You’ve seen how great Mark Zuckerberg of Facebook and Drew Houston of Dropbox perform as founders and you’ve been inspired. You think you have what it takes and you want to take the chance. Oh! it’s a great decision but are you prepared to take the risk? While these success stories are admirable, the journey isn’t seamless. Have you thought about their mistakes? Every first-time founder makes mistakes when building from scratch; from mishandling the company’s accounting to neglecting to write a partnership agreement. The list is endless.
Starting a new business can be a struggle. With your first business, you should be ready to learn and experiment. It’s okay to make mistakes if you are a first-time founder, but what could be detrimental is making the same mistake every first-time founder makes.
With available resources, you should be able to avoid common mistakes that could mar the progress of your new business.
If you are a founder, it means you are a true believer with passion and grit to solve problems with better ideas. You have just found a business that could change the world but the world might never get to experience the change if you don’t avoid these mistakes;
#1. Underestimating Market Risks
Downplaying market risks is one of the most common reasons you may fail as a first-time founder. It’s great that you have an amazing idea. But don’t take all the time perfecting it.
There are other areas to focus on. Ensure that your new venture delivers real business value. Don’t spend endless time on your new tech discovery without taking care of the business side. The first challenge you are going to face when you launch your start-up is being wrong about the market.
It’s no longer about what your discovery can do, but where to get the right people to buy into your idea enough to use it. Look for your potential customers, spend time with your potential customers, and know their needs so that you can solve their problems.
If you underestimate the market risk, your new idea and excellent set-up may not stand the test of time. This means your start-up won’t generate the profit you hoped for in the next few months. Oh! And you might not be celebrating your first anniversary as you dreamt of because your first venture could crash.
#2. Cutting Costs on Professional Advice
Stating a business can gulp a lot of funds. It’s only normal to consider cutting costs but it’s better to reconsider now before it’s too late.
Hiring the cheapest accounting and legal expert might seem like the smartest idea. But this might end up costing you more than a fortune in the end.
It’s not about the cost, it’s about the value it’s going to add to your new business. Marketing is also another area you don’t want to neglect. Rather than printing cheap flyers, hire marketing experts that can get the job done easily for you.
Did you hire key staff with little experience hoping to cut costs again? Don’t do it, because it’ll cost you more in the long run. Experienced staff will give you a better ROI than the flashiest resume with the cheapest pay.
Marketing, staffing, and expertise are significant areas you should never downplay when starting a business. You can cut costs in other areas like renting space rather than buying a building for your start-up or cutting down on luxurious expenses that won’t add value to your business.
The trouble gets real when you fail to protect your intellectual property because you are trying to cut costs. You may have heard of countless stories where co-founders pull out of the partnership and steal business ideas. Well, this could be your nemesis if you fail to protect your intellectual property before hiring or embarking on partnerships.
There are various ways to protect your ideas. You could use a patent, trademark, copyright, or NDA (Non-Disclosure Agreement). As long as you get the right expert for the job, your rights will be protected.
#3. Ignoring Feedback
As a first-time founder, you may think free advice and feedback are negligible. But it may be the saving grace for your new startup.
If your lawyer or financial officer advises you, don’t just brush it off. Pay attention to it when mapping out your business strategy. These experts have worked with countless first-time founders like you and they have enough experience to make sure you succeed.
A slight attempt at ignoring advice and feedback and taking a blind decision will cost you more than you can imagine.
While feedback and advice can help your business, you shouldn’t be too eager to seek help from anyone. Many entrepreneurs fail because they are eager to seek advice from everyone without checking their credibility.
When seeking advice, seek advice from experts with experience in your industry, rather than taking random advice that may create problems for you.
#4. Entering the Race in a Rush
You have a unique business idea and you are on the run to launch it before it gets too late. Most people would advise you to go first and fast so you dominate the market and gather the best talent. But growing at a pace is better.
Companies fail from growing too fast. It’s best to grow steadily and conserve capital until your company understands what your customers want and how to serve them.
Launching a startup as soon as you get the idea sounds good, but it’s not the smartest thing to do.
It will help if you learn how to walk before running, to prevent your business from failing even before you start.
Growing too fast is risky because a new business without a strategy will always have a weak business base. Don’t focus on becoming the biggest brand in the world within the shortest time. Concentrate on growing at a steady and strategic pace.