Ten mistakes often made by start-up businesses and what we can learn from them

Written by Fergus Doyle – The Business TroubleShooter

This is a cute idea

You are the inventor, the creator. It’s your idea and it’s a great one. You are full of passion and enthusiasm. Straight talking here now, the market i.e. your potential customer doesn’t pay for cute ideas. They pay for valuable products and services that solve their problems. If you refuse to listen to the market i.e. is anyone buying my “cute idea”, you may shut down. The most successful start-ups do good market research, make a prototype, and then take their product to market. They engage closely with their first batch of customers and where it makes sense they adjust the product to better meet the market needs. Be prepared to swiftly adapt your product to the needs of your customers.

What’s your plan?

You need a business plan and it needs to be written down. It doesn’t need to be big, lengthy or boring, but it does need to be concise and direct. What do you plan to sell? Who do you plan to sell it to? How are you going to market your product? How much will it cost? How are you going to make and deliver it to your customer? How much cash do you need to live and run the business before you have enough cash flow to sustain business? Might seem a bit obvious but most start-ups head off with an “I’ll figure it out on the way” attitude. Your plan doesn’t have to be long, 1 page is often enough, but you do need one.

It’s good enough – Just start!

One of the biggest things that the inventor of an idea has to get over is that, your product has only got to be good enough, it doesn’t have to be perfect, and you’re going to change it anyway, so just go and sell it. I hear one story after another of how a start-up spent so much money developing the product only for it to need a major makeover once it went into the market. Don’t be precious about your idea. Get something into the market as quickly and as cheaply as possible so you can make some money.

Surround yourself with like minded people

Unless you are a serial entrepreneur you will most likely come from full employment into starting your own business. It’s been my experience that, if so, your circle of friends or network will mostly be employees. It’s often not the best place to be getting advice on how you should start or run a business. Firstly, employees view the world from getting a pay check every week/month. You have decided to become completely commission paid. These are vastly different perspectives of the world. My advice is to get plugged into your business community as soon as possible so you can be supported by other business owners. The world of owning a business is often a lonely one and the more support you can gain from fellow owners the better.

You’re the salesperson – get over it

“….oh no I’m not.””Oh yes you are!!” You’ll most likely be the first employee in your business. For pure survival your business needs sales, and unless you have a bag of money to hire a salesperson, guess what? You’re it! It’s not that bad really but the sooner you accept it and get on with showing people your product the better it gets and the easier it becomes. Your passion and enthusiasm about your product is infectious and the main skill you need to learn is how to get in front of prospects to show your product. A little tip here is to make it your priority to meet 2-3 new prospects every week. Do this every week and you will build a solid business.

You’ll make mistakes – so what, move on

In the employee world we can often be taught that making mistakes is a bad thing. In the world of self-employment you will make plenty of mistakes. The only real mistakes are the ones you repeat. Read lots of books, build a solid group of business owners around so you can get solid advice, learn from their mistakes – they’ll only be too willing to share some war-stories.

Take care of yourself – stay healthy

If you’re like any other serious business owner you will work lots of hours. Starting at 9am and clocking out at 5pm will be a thing of the past. Having order to your day, a fitness schedule, eating the right food at the right time could also fall by the way side. I don’t advocate working 70, 80, 90 hours a week but you will work long hours and you can lose balance to your lifestyle. You must take care of yourself. At the beginning, you are the business. In the early years if you get sick no money comes in, so eat as best as you can, exercise as best you can, try to keep balance. Starting a business is a marathon not a sprint.

Cash is King!

….it really is! Watch every penny. Invest wisely. If you run out of cash you’re business will die. Learn early on that you can be profitable and run out of money, so keep an eye on where your money is, on how much you need to stay solvent in the early days so you can keep your business healthy. A great piece of advice I got very early on is that it takes 3 times as long and 3 times as much money as you think it will to start up a successful business. Wise words.

Be Honest – Where’s your integrity?

Don’t fall into the trap of making false claims about what you have and what it can do. You will want sales, you might even be desperate for a sale. If you tell little white lies to get a sale it will come back to haunt you. If your product does something great, say it. If it doesn’t say it doesn’t. Honesty is the best policy. Don’t put down your competitors, this is bad karma that will come back to bite you. Even if your competitors are complete rubbish it’s not for you to point that out. Let your product or service shine on its own merits.

Re-invest

When your business starts making profits there is a huge temptation to take a big pay-day in recognition of your hard work and efforts. Yes rewards yourself, yes take a pay check, but don’t starve your company of valuable cash. Re-invest in your sales & marketing machine, invest in smarter technology for your admin and operations. Re-invest ‘til you can’t reinvest anymore.

Summary

All of the points above are from personal experience and lessons I’ve learned from other business owners. It’s an exciting time with wonderful prospects. It’s never been a better time to bring a valuable product to the marketplace. Surround yourself with smart people, because smart people make smart decisions.