Every startup entrepreneur has apprehensions about the start their business will eventually have. It is never easy to run a business. What makes it even more difficult for startup entrepreneurs is their lack of experience in running a trade, which could lead to a lot of confusion, questions and doubts. They will have doubts on whether they have invested enough, financially, in the project, or if they had chosen the right way to launch it – apprehensions never end for them.
In the process, they might commit mistakes, or some may call it, silly mistakes. The nature and extent of mistakes an entrepreneur might commit differs according to what start-up he is involved in, yet, there are a few basic mistakes, which startup entrepreneurs normally commit. Such mistakes usually remain the same irrespective of the nature of business.
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1. Devoid of any backup plans
The typical startup entrepreneur has worked out the whole process beautifully on paper, and has what he calls a foolproof plan. But mistakes happen; at times they are victims of circumstance or because they were too optimistic with their expectations.
Remarkably, there are many startup entrepreneurs who walk into their new office, without ever bothering to have any kind of backup plan in place. They are too focused in their new business, and some even have full faith that their new venture will eventually succeed.
Many of these startup entrepreneurs have just come out with high flying management degrees. They believe they have learnt everything about business in college, and there is no way they could fail. That’s where things usually go wrong and that is when backup plans will help keep the company afloat.
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Here’s an example: what would happen if your marketing department fails to sell your manufactured product? Will you close your operations and risk losing millions, or put a different plan in place?
You either need to outsource your marketing operations, or start manufacturing more acceptable products for the market. There should be enough logistics arrangements to actually make your backup plan easy to execute.
And that will only happen, if backup plans are given due significance and planned accordingly, beforehand, as a rescue operation, if and when things go wrong.
2. Not having enough emergency funds
Many startup entrepreneurs are not concerned with backup plans, and they also don’t keep funds for emergencies. To enable a backup plan to function properly, it is equally important to keep sufficient funds aside to fund those solutions.
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Startup businesses usually involve huge sums. You may not have put your own money in the project, or perhaps have gotten funding from banks or other financial institutions. In such circumstances, unprofessional handling of your financial affairs could lead to losses, which in turn may prevent you from getting future monetary help from these institutions.
Having emergency funds can also help put off foreclosure from clients who reneged on their payments, or losses suffered from damaged or missing stock, until the flow of income steadies out to give stability to the company.
3. Focusing too much on results
Entrepreneurship is about designing and maintaining the flow of business in the desired manner. It is also about helping the firm function in a result oriented mode. If an entrepreneur does exactly that, then the performance of the firm will be better. This will lead to substantial monetary gains as well. Thus, instead of thinking about the results, one should work for the results.
Usually startup entrepreneurs are too concerned with getting instant results, rather than setting their business basics right. Many startup entrepreneurs believe in short term results. For them, initial performance matters the most and they measure performance in terms of pure profit. And in doing so, they overlook the elementary facts of running a business successfully.
For any type of business, one needs a good foundation which includes the right kind of infrastructure, and the ability to implement strategies that were prepared before the start of a business. Focusing too hard and too much on profit-driven results will hamper the growth of startups before they even leave the ground.
4. Lack of stability in pursuing a strategy
The best thing about startup entrepreneurs is their willingness to pursue plans. They would give their all, for the plan to work perfectly but as soon as they face a hitch, some will waver, and start looking to approach the process differently.
Every startup business works on and around a planned strategy, the approach of entrepreneurs might be a little different, but it is important for them to stick to the chosen approach. Changing your approach too soon will lead to confusion and rather than solve the problem, it may leave you dangling between two possible paths of solution with no end in sight.
Such fickle-mindedness speaks about the level of preparation (or there lackof) on the part of the entrepreneur. It also means that you have not done your homework before jumping into the business.
Changing methods too soon will hamper growth, because you will have to start learning about the new method before implementing it. Give your methods some time, or put in some more effort, and you might get the results you want.
5. Led by too many opinions
If you own a startup, whether you are given unsolicited advice by well-wishers (friends and family who are business-minded) or if you proactively seek out the answers you need on your own, be wary of being overwhelmed with too many colliding opinions.
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Having too many people volunteer different suggestions can lead to a lot of confusion, which leads to a lot of indecision on the new entrepreneur. This is bad especially when he has to make a tight call. When there are a lot of opinions weighing on your mind, you may end up making a split-second decision, which is very bad for business.
Business decisions may be made partially by instinct and by knowledge, but knowledge cannot be obtained merely by listening to everyone’s suggestions. Sometimes it is a lot better and easier to learn from experiencing it yourself.
Alternatively, it may be a good idea to have experienced business partners whom you can trust. They can help you avoid basic mistakes in your daily dealings. They will have the company’s best interest at heart and would not advise you on actions that may lead to its premature downfall.
You can also consider hiring a consultant to look at your business plan and give you their professional opinions based on their understanding of the current market, before you launch your business.