We all make mistakes.
We’ve all gone over on our Weight Watchers points, texted an ex, and bought a really bad shirt that we thought was ahead of its time (one of mine is pictured here, I’ll let you figure out which one).
Unfortunately though, there are some times where mistakes are harder to take and even harder to justify. Starting a business is one of them.
There are a few reasons for this. It’s a huge investment in terms of time and money, and entrepreneurs generally have people invested in the idea that can be relied on to make it work. But maybe the most important and overlooked reason to give starting a business everything you’ve got is that it’s your passion.
Your business is your baby. If there’s any true incentive not to screw it up, it’s that your idea deserves a chance.
Sure, there are some unavoidable reasons why a business venture might fail. But there are also things entrepreneurs can do to give their idea the best shot at success.
1. Don’t be a Lone Wolf
There’s a narrative around small business known as the “lone wolf” or “one-man band.” The terms really speak for themselves, but they reveal an interesting myth around the entrepreneur and small business owner: they do it all themselves.
In some ways the myth is true. A single entrepreneur or small business owner may hold a ton of titles and do much more work than the average head of a larger corporation. At once, they could be the company’s bookkeeper, social media manager, head marketer, and customer service representative.
What’s often overlooked with this “do it yourself” model is the fact that many entrepreneurs have a decently-sized support system backing them up. Don’t fall into the trap of doing it all alone.
Even if your support system isn’t full of friends and family, entrepreneurs should at least have access to:
- A trusted accountant
- A lawyer
- A banker or bookkeeper
These are specialized positions with responsibilities that entrepreneurs shouldn’t be tasked with doing themselves. Unless you have a law or accounting degree I guess.
It’s an easy mistake to avoid, and will save you in more ways than one.
2. Learn the Market
Many entrepreneurs come up with their product and business ideas from experience. Whether they’ve worked in their specific industry or have learned about it in different ways, entrepreneurs must have a keen knowledge of their product or service before starting a business.
But knowing what you’re selling isn’t everything.
How you’re selling and who your selling to may be even more important.
Knowledge of an intended market is crucial to the survival of any venture. Is the market saturated? Empty? Who’s the demographic? These questions influence major decisions for your business.
Knowing your intended demographic helps you decide what your marketing efforts will look like. You’re probably not going to spend as much on digital ads for 90 year olds, or put athletic wear on shelves in Toys R Us. I mean, you probably don’t want to put anything on Toys R Us shelves.
Anyway, knowing your product or service is important to starting a business. Just don’t make the mistake of thinking that’s all you need to know.
3. Financial Preparation
This is a no brainer. Entrepreneurs need financial resources to get their ventures off the ground.
Funding doesn’t fall from the sky. It should be a top priority to get the ball rolling on contacting potential investors, talking with your bank, and looking into possible opportunities for getting a small business loan.
The mistake entrepreneurs often make when money raising is asking for too little.
The fear is that potential investors and partners will back out of a deal if entrepreneurs ask for too much. This is where research comes in handy once again.
Going into a meeting, having done your homework on why your idea and business is worth as much as you think it is, gives investors and partners solid footing when justifying giving you money.
Same goes for talking with banks and asking for loans. If you’re going in with no understanding of your expenses, you’re unlikely to gain the confidence of your banker.
Starting a business is expensive, running one is expensive, and failing can be more costly than both. Make sure you go into the room prepared, with research in hand, and don’t undersell yourself. You know your idea is good. Everyone else needs to know.
These mistakes are easily avoided for entrepreneurs. Ultimately, they all boil down to a need for research. Without it, you’re going in blind.
Worse than that, people can see you don’t know what you’re talking about from a mile away. Don’t be that person.