Businesses don’t fail; entrepreneurs fail. While it sounds impolite and punitive, many a times this is the case. If you are a second time entrepreneur, then you will agree out of your experience that the execution takes the toll and the efficiency at the execution level decides the fate of your business.
Take for example the case of Apple. Apple sensationalised the use of a tablet computer by making iPad Tablet Computer in 2010. But Apple was not the first to introduce the tablet computer to the market. Microsoft had already introduced the concept of a tablet computer way back in 2001-2002 timeframe. So what was the difference between these two entrepreneurial honchos – Bill Gates and Steve Jobs – which made the difference in the sales of their respective tablet PCs? Definitely it was the aesthetic finesse with which Steve Jobs would introduce the products to his customers and his marvellous skill to get his vision executed by his people.
Similar is the case with Facebook. Mark Zuckerberg’s execution plan was incredible. Remember Facebook was also not the first of its kind social media networking model. MySpace and Friendster were already doing the same thing.
Coming down to the mistakes that an entrepreneur must look for avoiding when starting up are mostly related to the execution stage. This is the stage where all the action takes place – whether blunders or wonders.
1. Do Not Cheat Yourself
An important aspect to understand is your personality – whether you are the entrepreneurial type or not. While it is certainly exciting to start your own business, entrepreneurship is not for everybody. So, it is important to first understand whether you can brave the rough weathers that the entrepreneurial journey promises.
Another aspect to understand is your area of passion. You may have a brilliant idea which falls under e-commerce industry, but your true passion and skills lie in technology. In such a situation even if you start-up thinking that the thrill of starting up will pull you through, then you are be-lying yourself.
2. Do Not Drain Yourself Financially – Keep A Budget
When you are starting up, it is prudent to have a sound business plan. A good ‘fool-proof’ business plan will make you understand the cost outflows, revenue potential, cash flow management for daily operations and the time that your business will take to reach break-even. Having this data in black and white will guide you whether you are able to achieve your financial goals with the seed investment that you and your founders would have invested. If you avoid having the data, then you might lose track of the expenses and will not be able to analyse whether the expenses were justified or not. You will get in ‘gambling’ sort of rut and may be compelled to fuel more and more of your finances (after all, you would have toiled really hard to make your start-up a success), and this isn’t good.
3. Do Not Assume That You Will Receive Funding
Taking the plunge with the assumption that you will be able to raise external investment is a common mistake and must be avoided. You may have done your part by finding out the investors who invest in your industry, but by the time you launch your start-up, the situations may have changed drastically. Investors’ preferences change based on the total available funds in certain span of time (generally 5 years) and also the possible exits that they are expecting within some defined time line. So, a business plan based on assumption that external funds will be available, say after six months – is not a good practice. Your model must be a bootstrapped model.
4. Do Not Be Rigid About Your Idea
When you are starting up be flexible. You must remember that the true spirit of entrepreneurship is to judge the tenacity of a business model to make itself financially worthwhile; and not in clinging to your idea which fails to generate profits worth the mention. Just as your fortitude propelled you to starting up, it must give you enough sanity to disassociate with a business idea to either close it down or to change it to something else that seems more promising.
5. Do Not Ignore Important Processes
Processes and policies are mundane in nature but have very important angle while executing a business. So do not ignore meeting processes and putting policies in place, especially the HR processes and the legal processes for forming a company. You wouldn’t want your start-up to stall because of faulty processes.
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Your points are very important and effective, i am going to launch my own business and after read your post i feel that these points can help me start and boost my business. I like all your points, but this one is very important and it can give you surety that you will not lose your business that “Do Not Drain Yourself Financially – Keep A Budget” because some times people do this mistake and lose everything.
Dear Web design company,
I hope you gain more insights from us. Here’s wishing you all the very best for your start-up. Good Luck!
Usually people start business without any planing and after a short period they have to pay for it. I am going to start my online business near in future and your tips and ideas are really awesome to be a successful business person.
You are right zend framework team. Planning often is an underestimated task. But to put the odds in your favour, you must plan for entrepreneurship. It will help you avoid at least some of the common mistakes. Wish you the every best for your start-up.
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