Startups: Avoid These 5 Common Mistakes
Following a Passion Not a Need. For a concept to be successful it has to fulfill a need in the market place, beyond just an individual's personal interest. Be observant, what do people need or want and how can your passion, knowledge, or expertise help.
Letting Go of An Idea too Quickly. Failure can keep a new business owner up at night. Explaining a business concept to others to gain validation or letting the opinions of nay-sayers derail efforts, is common when getting an idea off the ground. However, minimize the highs and lows of new business ownership by writing down your benchmarks to success and your redflags, then give your idea time. You can throw all the resources and effort you have at an idea, but some things (like market saturation) just take time. 3 years is often the go-to length of time.
Over Spending or Underestimating Expense. I’ve had a few juicy debates about budgeting and forecasting for startups. Some say it is all a guessing game- any reports on future breakeven points and profitability are a work of fiction. This may be true, but what is non-fiction is that without a budget, financial plan, forecasting or going through the process of making something, many startups over spend or underestimate their expenses. You can have all the financial resources in the world, but there is a point where you lose profitability by overspending, so make a plan.
Not doing the Research. There is a wealth of knowledge available to business owners these days. Take the time to make yourself knowledgeable about your customer’s needs/behaviors and, of course, that of your competition. It’s a cliché, but knowledge is power. When you get to a point where you’re stuck, seek out more information and the advice of others who can help you discover your next steps. Ego often keeps us from seeking help or being open to advice. No one knows everything and it’s not even about knowing everything. People know different things and in pulling our combined knowledge we can move mountain.
Overlooking Trademarks and Patents. If you have an idea or invention that is substantively different than what is in the marketplace look into trademarks and patents. If you do not own your idea, someone else will. From an investment standpoint, you don’t own anything to invest in.
Best of luck with your startup.