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What is the most common mistake entrepreneurs make in the first 1-2 years of business that can easily be avoided?
This was the question StartupNation asked of 12 successful entrepreneurs. The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
1. Spending Too Much Time on the Computer
During the first year of working for myself, I measured my productivity by the amount of hours I spent in front of my screen. It was only when I got offline and started meeting people and getting inspired from influences outside of the Internet that I saw growth and the magic began to happen. For new entrepreneurs, I recommend balancing time online and offline to truly be productive!
2. Taking Too Long to Get to Customers
Don’t wait around for the perfect time to get in front of customers. The direction of the business will make the most changes within the first two years of operation, and that change is driven by customer needs. Get your product or service in their hands as soon as possible, and iterate often.
3. Mismanaging Finances
Many entrepreneurs mistakenly think they can manage their own finances. It’s important to establish your financial infrastructure early on to build the support you need as you start to earn revenue, receive funding and get into more complex financial situations. Outsourcing your finance function from day-to-day accounting to strategic finance frees up your time to focus on your core business.
4. Not Focusing on Profit-Producing Activities
As entrepreneurs, we wear many hats: we’re the admin, bookkeeper, salesperson and CEO. I’ve found that the average entrepreneur spends only 20 percent of his or her day on profit-producing activities; this stunts growth. Refocusing your daily activities on what’s most likely to move the needle (and delegating the rest) will produce the fastest, largest and best results for your business.
5. Sticking too Closely to a Business Plan
Entrepreneurship requires flexibility. Sticking too closely to the script, without the ability to pivot, is nothing short of detrimental.
6. Losing Focus
For an early-stage startup to have any hope of success, absolute focus is necessary. The only way you can stand out from the crowd is by focusing on doing one thing spectacularly well. This is where your entire competitive advantage comes from. Your first version shouldn’t try to please everyone, but it should absolutely thrill a target group.
7. Procrastinating Product Launch
There is no such thing as a perfect product or service. If you spend all your time just tweaking and supposedly perfecting your product, it will never see the light of the day. Products evolve over a period of time through constant customer feedback and use. Don’t delay your launch for this one reason. Let your customer decide if the product is of value.
8. Making Something No One Wants
It’s easy to assume that because you love your business idea, others will too. Often, people spend months or years building a business only to discover no one wants what they’re offering. Before you start building, put together the bare essential of your business and present it to potential customers. Listen carefully to their feedback and be willing to make changes and adjust your plan.
9. Taking Poor Advice
We made this mistake many times. We’ve had the opportunity to talk with unbelievable mentors, CEOs, investors and leaders who told us what we should or shouldn’t do. We let that influence us way too much. No one knows as much about your company and your customers as you do. The truth is that there’s no right answer to the challenges you’re facing. The only answer is to do what you believe in.
10. Spending Too Much on Overhead Costs
Cutting overhead costs while starting up was one of the best things I did for my company. Rather than spending excessive amounts on office space and hiring before you’re really ready, invest in things such as accounting software and top-notch consulting.
11. Doing It for the Wrong Reasons
I see so many budding entrepreneurs getting into business because they think it’s a sexy thing to do or a way to avoid working in the “real world.” If you’re going to become an entrepreneur, make sure you know from the get-go you why you’re doing what you’re doing, which problems you want to solve, and where you’re headed long term. Otherwise, it’s easy to become buried in details and lack purpose.
12. Lacking Market Planning
I hear many great ideas from new entrepreneurs, but their plans usually end there. And although it’s true that some businesses go viral on their own, more often than not a company’s marketing plan will determine its success. Never expect customers to flood your business no matter how great it might be. Instead, have a plan in place that will proactively get you out there.
– Nicolas Gremion, Free-eBooks.net