When it comes to launching and running a successful early-stage enterprise, no one has all the answers — not even that veteran serial entrepreneur on her sixth startup.
As a first-timer, you’re at a much greater disadvantage, resigned to feeling your way from one crisis point to the next, hoping you’ll be able to keep things together until you’re cash flow positive and you can actually sleep a full night for once.
You’ll be much likelier to find yourself in that enviable position when you avoid these five early-stage mistakes. How many have you encountered already?
- Going in Blind
Do you have a business plan?
No? Better draw one up, stat. Consult with a seasoned entrepreneur or business coach for help, then run your finished draft by trusted third parties: former colleagues, bosses, and friends who aren’t worried about offending you.
- Deviating from Your Business Plan
No one can predict the future, but there’s no need to deviate from your business plan absent some fundamental change in conditions on the ground.
“Despite unforeseen challenges, we largely stuck to the business plan we drew up before purchasing Gull Harbour,” says David Janeson, a Manitoba-based entrepreneur who owns a small vacation property on Lake Winnipeg. From the start, Janeson and his wife planned to completely remodel the property. After studying previous attempts to remodel comparable properties, they knew roughly how much time, labor and funds they’d need to devote to the project.
- Losing Grip on the Bottom Line
Far too many entrepreneurs spend freely before they should, starving themselves of the capital they’ll need down the road.
By the same token, some entrepreneurs are too reticent to spend when it’s really necessary. By the time they’re forced to make targeted investments in their businesses, it’s too late. Find the middle path and stick to it.
- Hiring the Wrong People
According to business efficiency expert Falon Fatemi, the cost of a bad hire can be astronomical: $240,000, on average, by one count. For a cash-poor startup, a single bad hiring decision could turn out to be fatal.
There’s nothing you can do to guarantee only great hires, but adding extra layers of vetting and leaning on your personal network for referrals can do a long way. If you do feel you’ve made a poor decision, take remedial action as soon as possible.
- Leaving Your Intellectual Property Exposed
Is your intellectual property locked down? It should be. Without ironclad protection for the formulas and processes that make your business unique, it’s vulnerable to duplication and poaching.
There’s no shortcut to ironclad IP. Consult with an intellectual property lawyer for guidance on how to proceed.
What’s Your Achilles Heel?
Every entrepreneur has blind spots. To some extent, business ownership is the story of recognizing, addressing, and minimizing these weaknesses.
Painful as it might be, a period of intentional self-reflection is in your best interests. If you haven’t yet made any of the mistakes listed above, it may only be a matter of time — and it’s up to you to react with grace should that day come.