The Most Common Startup Mistakes – And How To Avoid Them
by Dominic Basulto, contributing writer
For first-time entrepreneurs, coming up with a good idea for a new product or service is just the start. After all, a good idea is just that – an idea. Without the right skill or experience, that idea might never get off the ground. To transform that idea into a real, successful business, you’ll need to avoid these common startup mistakes.
Jumping in without a plan
The thought of running your own business can be so exciting (and some might even say intoxicating) that little or no thought is sometimes given to actually coming up with a plan or strategy. And, indeed, many business media publications like to popularize the notion of people quitting their full-time jobs and almost overnight, turning a great idea into a billion-dollar company.
However, experienced business coaches will always tell you that you need a plan before you start. At a minimum, you need to start putting down numbers on paper and figuring out exactly what’s needed to succeed. If you’re a new restaurant owner, for example, you need to figure out how many customers you can serve each night, what the average size of a check is going to be for each meal, and what the acquisition cost is going to be for each new customer. Once you have those numbers, you’ll have a good idea of whether or not you can afford to rent an expensive storefront on a busy Main Street.
Failing to create a cash flow cushion
You’ve probably heard the business adage, “You need to spend money to make money.” And that perfectly applies to the process of starting up a new company. You need to spend money upfront before you can ever make a single sale. You’ll need to get your website up and running. You’ll need to hire employees. You’ll need to acquire initial inventory of whatever product you plan on selling. So you need to make sure that you have a “cash cushion” that can protect you until you start making enough in sales.
A good business coach will be able to provide invaluable advice here. For example, he or she can advise on ways to bootstrap your company using a wide variety of financial resources. And he or she can also help you set up a monthly budget, so that you are not burning through too much cash each month.
Not marketing your business
Another common mistake is to assume, “If you build it, they will come.” In other words, it’s natural to assume that once you set up an e-commerce or brick-and-mortar storefront, people will start making orders immediately. But what that ignores is that you need to market your business and get some traction in the marketplace. How do you plan to get customers in the door?
For example, you might start by sending out 1,000 email messages to people on your mailing list. If sales are still sluggish, you might send out a piece of direct mail to every household in your zip code. But what if that still doesn’t result in the types of sales you need? That’s where a business coach can play an important role, pointing out the various ways that you can market your business efficiently.
The good news for DIY entrepreneurs is that many business coaches can help you steer away from these common mistakes. In doing so, they can help you avoid lost time, resources and money. Instead of making the same mistakes that everybody else makes, you will have extra time to map out the next stage of growth for your business.