5 Biggest Entrepreneurial Mistakes
Listen up entrepreneurs: Right now might be the best time to launch a start-up, but just because you have time on your side does not mean you're destined for success.
Everyone knows starting a business is a difficult and risky task. It takes the proper combination of ambition, business knowledge and sometimes even luck to get a business off the ground. Just ask Jerry Kaplan, a well known entrepreneur in the computer industry. Kaplan was involved in launching online companies such as Onsale Inc., GO Corportation, Egghead.com, and also published the popular book Startup: A Silicon Valley Adventure.
Kaplan spoke in 2003 about the five biggest mistakes an entrepreneur can make at Stanford's Entrepreneurship Corner:
Here is a summary of five common mistakes:
1. Having Unclear Goals and an Unclear Mission
Clearly you have goals and a mission — but how detailed are they? It is important to have a detailed outline of specific goals. Even doing something as simple as drafting a mission statement along with goals will enhance your focus.
2. Trying to Prove You are Smart
Adversity is not an uncommon obstacle for entrepreneurs — many people will doubt your ability to attain success. A mistake young entrepreneurs often make is focusing more on how they come across to build their own ego than focusing on building the company. You should start a business to improve the way an industry operates, not to build your image.
3. Money, Money, Money
A start-up business does not make money right off the bat. If you found a company expecting to make a big paycheck immediately, you will realize this is not the case. Some start-up business owners start making budget cuts here and there to insure they are still making a profit — this almost inevitably leads to failure. Kaplan states that greed leads to key mistakes in an entrepreneur's business.
4. Hiring Your Friends
Everyone wants to work with people they like, but when you are trying to launch a business it is more important to hire people who meet your business needs. Bring in people who supply different skills and ideas to the business. Running a company is very stressful and hiring friends may not only be detrimental to the growth of your business but it can also ruin relationships.
5. Not Knowing When to Say When
This may be the most difficult one to understand. Kaplan says starting a company is like raising children: As your company grows and matures there may be a point where you will have to self-assess and realize that it is time to let go. You may be a brilliant start-up CEO, but running a multi-million company is a completely different ballgame. If you want to look out for the good of the business you must find people to run areas that are not your expertise. Selling the company is not necessarily a must, but distributing power equitably is.
Starting a new business comes with a lot of responsibility and stress, but taking the right steps in the beginning stages can increase your odds of success. You must be selfless when it comes to the start-up and its needs while being willing to ask for help. If you can do this while maintaining your drive, you will be well on your way to launching a successful start-up.