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- implied, on 02/07/2008, -6/+6311.) Blow all money on coke and hookers
- inactive, on 02/07/2008, -1/+51#13. Cutting costs with cheap Web hosting
- tghd, on 02/07/2008, -3/+47What are the common mistakes that new entrepreneurs make and how can you avoid making them yourself? Here is our top 10 list of mistakes people make when starting a business:
1) Not enough money.
The most common reason why new businesses shut down is that the owner runs out of money. Cash flow is critical to a startup business. You could be profitable and still have to close your doors because your customers are taking too long to pay you. Cash is king in a startup venture and you need to prepare for it.
One option is to make sure you have enough startup capital from your own investments or outsiders (bank loan, private investors, etc). A second option is to ease into the business so that you start doing it on a part-time basis until you know that it will make enough money to support you.
2) Not thinking survival.
Starting a business is all about survival. How do you stay around one more day so that you can learn more about your market and close new customers?
At the beginning stages of a business this may mean doing work that might not be completely what you want to do but it helps pay the bills. You need to do whatever it takes to survive and get through until the business can fully support yourself.
3) Losing momentum.
Many new entrepreneurs have ambitions to start a business so they create a website, try to make a few sales, go all out for a few months and then stop completely. Building a business is all about momentum. If you had 24 hours to spend on a business they would be put to far better use by spending one hour a day than for 24 hours straight.
It takes time to develop a new company and for people to react to what you have to offer. Never lose the momentum and even if your business is only a part time initiative for you at the moment, make sure that every day you are making progress of some sort to move your company forward.
4) Doing it all alone.
Nobody is perfect or has the skills to do everything themselves. You need to understand what it is that you bring to the table and what you need to surround yourself with. If, for example, you are very strong at inventing but don’t want to sell then you need to find a salesperson to help you.
You won’t succeed by forcing yourself to do things that you truly don’t enjoy and will never be good at. Know where you stand and what value you can offer. By getting people around you who complement your skills, you will be able to achieve your goals and have a lot more fun along the way!
5) Not hiring right away.
You should begin looking at who can be brought on board to help you from the first day of starting your company. There will be tasks in any business that you, as the owner, should not be focusing on if you hope to build any sort of sizable organization. Why are you doing admin work when you should be out closing customers, talking to the media, and landing new partnerships?
But I’m broke! How can I hire someone? Even if you have a $0 budget you can find people to work for you through high school and foreign student internship programs. Once you have a budget, you can bring people on board for as little as one hour a day (what I first did) and then increase their hours when you can afford it. You need to be spending your time working on the business and not in the business.
6. Doing it just for the money.
If you don’t truly love your business then you won’t be successful. If you read the stories of famous entrepreneurs and how they built their organizations you will find that it all comes down to the root of loving what you are doing.
Money is definitely important, as most companies are for-profit enterprises, but it will often take a long time to come and if you don’t truly enjoy your work then you won’t be able to convince yourself to keep going. You can only do something that you don’t really love for so long before you give up.
7. Getting to year 1, past year 2.
Many entrepreneurs have a hard time getting to the end of year one. Typically it’s because they started the business on a whim and got excited about an opportunity but didn’t do the proper research. These entrepreneurs usually run out of money and close down after a few months.
A second challenge is getting through year two. It usually takes three years of hard work to make a business. Year one is all about the excitement of getting started. You’re high on energy and ready to take on the world. In year two entrepreneurs often find themselves still not making much money and the startup excitement has faded. You’ll need to work your way through the downturn and know that the money is coming if you keep at it.
8. Don’t build around a customer.
The best way to make a lot of money quickly is to find a customer who has a problem and is willing to pay you to solve it - and then you go out and build the solution. Most entrepreneurs take the opposite mentality of “if I build it, then will come” only to realize that they’ve built it and nobody is coming. Instead of talking to customers as to why they’re not coming they decided to continue building and building. Soon they find out that they’ve invested years of work and nobody is interested in buying from them.
The companies with the highest failure rates are restaurants because they are usually built around an owner’s personal tastes. Meanwhile, the entrepreneurs with the lowest failure rates are lawyers and accountants because they are based around a service that we all need (whether we like it or not!) Talk to potential customers, see what they are interested in, identify who has money and what their pains are and then create your product / service around them.
9. Don’t seek mentors.
A great way to get a business going is to find out what other people have done to achieve success and implement those strategies into your own company. Find mentors who have knowledge of your industry and will give you time out of their day to help you.
You could set up a formal board of advisers and compensate people for their time but if you’re a startup you can play on the fact that most entrepreneurs are willing to help out a fellow business owner as a way to give back. If you show genuine appreciation and approach the right people, the advice you get will help make or break your company.
10. Don’t get involved in the community.
Tied in with not seeking mentors is not getting involved in the small business community. Countless opportunities are generated by connecting with other young entrepreneurs and finding out what they are up to and how you can help. You will get new business opportunities, partners, investment, media attention, ideas for productive tools to use, advice for your company, and many other resources that otherwise would take you years of trial and error to figure out (if you ever do at all).
A great community to be involved in, needless to say, is the Young Entrepreneur Forums, where there are over 32,500 entrepreneurs waiting to meet you and help you grow your business!
Evan Carmichael
YoungEntrepreneur.com Blog Manager - Civil44, on 02/07/2008, -0/+39I always wonder how 90% of the kiosks in the mall stay open for more then a month. Then I realize only about 50% of them make it past 3 months, and I wonder what those people where thinking selling fairy wings, glass trinkets, ***** jewelery etc in a spot with rent around 1000-2000$ a month.
- SEMaven, on 02/07/2008, -0/+35Be-your-own-boss doesn’t translate to sleeping late, long lunches, and calling the day early. I see a lot of naïve new business owners…uh I mean entrepreneurs who think they won’t have to put in as many hours as their previous job because they get to set their own schedule.
- sundancekid503, on 02/07/2008, -2/+31Dude, it was a "team building" excercise....
- brufleth, on 02/07/2008, -0/+17In most cases it is the exact opposite of laid back. Working for a big company you can often slide by doing minimal work as long as you keep up appearances. Your own business will fail if you don't put in the time and effort. Especially when first starting out this can mean very long hours.
- wetdog, on 02/07/2008, -0/+16I had a kiosk for a while, and you know, I wonder how people afford it too. Our rent was $800/mo normally, but $3500/mo for the x-mas rush at november and December. Ridiculous! We were selling a hot item that year, and did probably 3x as much business as most kiosks in that place, and we still were barely able to live on it. Those people selling little trinkets must go broke.
And on top of that, kiosks get treated like second class stores, both by customers and by the mall. - khail250, on 02/07/2008, -1/+17because they buy it for 20x cheaper from china...
- gkzhang, on 02/07/2008, -0/+12google cache caught it:
http://64.233.169.104/search?hs=sUq&hl=en&lr=&c2co ... - Rhettsta, on 02/07/2008, -2/+1413.Running a website and not surviving the digg effect
- Eldorian, on 02/07/2008, -1/+13Actually you can easily get away with that if you know how to outsource and delegate.
But people who are smart to do that wouldn't waste their days with sleeping late and having long lunches. - Awspire, on 02/07/2008, -0/+12"Our rent was $800/mo normally, but $3500/mo for the x-mas rush"
Goes to show that real estate is the most profitable of all. - appletalk, on 02/07/2008, -5/+1611.) Rent a server that gets owned by digg effect at 143 diggs
- 4degrees, on 02/07/2008, -0/+8i will have to disagree, you can take long lunches and sleep late and your business will succeed. the KEY here is getting things done. If you can still get ***** done and sleep late, more power to ya.
- springboks, on 02/07/2008, -0/+7That poor attractive woman, she can't even afford shoes
- raw10, on 02/07/2008, -1/+811) Spending too much time on Digg.
- magicbullets, on 02/07/2008, -1/+712. Believing that VCs are 'the *****'.
- rootofunity, on 02/07/2008, -1/+714. Quoting a ***** rap song.
- gglynn07, on 02/07/2008, -0/+6The biggest mistake I see people make in my business is people hire out as contractors under a Tax ID# and go buy the biggest friggin' truck they can find and spend a bunch of money making it look "spiffy." I guess that can be filed under useless speding.
- howdareyou, on 02/07/2008, -6/+1211. Hosting your site on Wordpress.
- serpanterra, on 02/07/2008, -0/+5OK.
#1 Don't write what you just did - liuite, on 02/07/2008, -1/+6i ran a business once and was undercapitalized...you have to be able to adapt and adjust quickly if you realized you miscalculated the demand for your products and services. I could have changed my business model and continued if I was well financed.
- inactive, on 02/07/2008, -0/+4#1 should be: don't thinking you can do your own taxes/payroll/bookkeeping.
good luck with that *****, w2,w3,940,941,de6,de7 - tax tables for personal, and federal income taxes are paper copy only - plus figuring out fica, futa, ett, that ***** is a ***** nightmare. If you think the tax system is *****, try starting a corporation. - smackhero, on 02/07/2008, -0/+4he's using wordpress as a CMS, not being hosted on WordPress.com's servers. if he were on WordPress.com, he'd be able to survive the digg effect.
when will you illiterate idiots stop blaming WordPress when the MySQL server craps out? - somnium, on 02/07/2008, -0/+4You are dead-on, 4degrees. And yes, I own and operate my own consulting biz. I'm at the 4 year point...and I can easily take days off, long lunches, sleep in, or call it a day early. *But*....the hours still have to be put in... although as I get better at my job (and more efficient) the hours just don't seem bad at all. Especially when *you* are calling the shots, not some bone-headed boss.
- Klowner, on 02/07/2008, -0/+4At the local mall here there's this one kiosk that sells skin moisturizers and various skin cream crap. They typically have 2 or 3 people working it, and they actively try to get the attention of people passing by them with "Can I ask you a question?". It's like going to a frickin' carnival. They've been there over a year though, so I guess it's working.
- Brad324, on 02/07/2008, -0/+4I think getting too ambitious and unrealistic is the worst mistake most make. You're much better off thinking of a small operation, perhaps owner/operator, until you have a solid "meat & potatoes" consumer base to expand - unless of course, you have all kinds of money to invest in it.
- buckrogers1965, on 02/07/2008, -1/+5Just think how much money you could save companies by eliminating the IRS.
- evalionint, on 02/07/2008, -1/+4Not blatant as you said it but plain stupid.There are people out there who say something like this when they don't have anything to say.It makes them fill more important.
- leerayIG88, on 02/07/2008, -0/+3Being a pimp, I think starting your business is tough. You gotta watch your women like a hawk. You can never trust them, you just gotta pimp slap them for the sake of your business. The more women you have, the more money you will rake in.
- digindrivefast, on 02/07/2008, -0/+3#10 !
Thanks for the read. I'll send it to my ex/boss too! - keegster, on 02/07/2008, -5/+8Heh, the website of someone talking about how companies fail is down. Irony much?
- joclark, on 02/07/2008, -0/+3Your business can only grow as fast as your systems can handle the input. Most entrepreneurs are sales and customer service driven individuals. What catches them are the internal systems (customer database, project tracking, quality assurance, vendor management, business taxes, HR) that require attention and time.
That's why you see some business grow quickly to a certain revenue level, then just hit a ceiling. They don't have the systems to take them to the next revenue plateau. - LogicBomB, on 02/07/2008, -1/+4Passion is a big motivator. People who want to get paid for this passion survive. People who come up with an idea they don't care for to make money will die.
- lucidapathy, on 02/07/2008, -0/+3My thoughts exactly. I use wordpress, and it's just a matter of being able to handle the bandwidth... not that Wordpress freaks out.
- deepdiggdude, on 02/07/2008, -0/+3Yep. You know who I admire? Those guys who collect recyclable cans and bottles all day. They work hard. I call them can-trepreneurs.
- BlkGuyAtThePrty, on 02/07/2008, -0/+3another mirror: http://istackdollars.com/newswire/10-mistakes-peop ...
- Klowner, on 02/07/2008, -0/+3What about rewarding yourself for securing a sales meeting with a potential client by leaving work early to go to the bar next door and getting sloshed at 3pm?
.. stupid boss - smackhero, on 02/07/2008, -0/+3yea, they must have pretty small profit margins, but i think most kiosk owners run multiple kiosks at different malls. so if you hire decent sales persons and run maybe 6 or 7 different kiosks it might be profitable. but it's certainly not a desirable long-term business model. they're likely aimed at people just starting up a business for the first time and can't afford a regular store front.
- inactive, on 02/07/2008, -0/+3i dugg you up. cause it's true, if you hit the bars mid day. you'll find it's mostly small business owners. no *****.
- carfey, on 02/07/2008, -1/+4Am I the only one who thinks the *blank* much thing needs to die?
- 0crabby0, on 02/07/2008, -0/+3I'm on my third business - I managed to sell both of my other businesses for profit.
My biggest mistake this time (a year ago) on my third business - Is underestimating the cost of liability manufacturing insurance for my product. This cost was 80K more my first year than I was expecting(virtually all of my profit!).
I've managed through hard work(redesign of my manufacturing process) to cut my insurance down to 50K less than I was paying. - PabloMac, on 02/07/2008, -0/+3I own a sign and design business, and in my region new businesses crop up every year around tax-refund time. There are 20-30 small storefronts in my town that are empty half of the year, and I keep my eyes open for people moving boxes and furniture inside. When I approach them for their signage needs, 75% of the time they shrug their shoulders and ask their "business parter" something like, "Martha, were we going to put up a sign?"
More times than not, they want a thousand-dollar sign for $10, and wind up spray-painting a sign on cardboard and calling that good. And, 2-3 months later, they're gone. - Gryffydd, on 02/07/2008, -0/+3How's that old saying go? Entrepreneurs live for a few years the way most people won't so they can live the rest of their life like most people can't.
- LongShlong, on 02/07/2008, -0/+3A wise man speaks because he has something to say. A fool speaks because he has to say something.
- 0crabby0, on 02/07/2008, -0/+2She can make them with straw(or in this case shredded documents), I believe make.com has the templates...
- 0crabby0, on 02/07/2008, -0/+2I agree, you are right for brick and mortar business but they're probably thinking more of a net business.
- BlkGuyAtThePrty, on 02/07/2008, -0/+2mirror: http://istackdollars.com/newswire/10-mistakes-peop ...
- Nougat, on 02/07/2008, -0/+2Mirror: http://64.233.167.104/search?hs=sUq&hl=en&lr=&c2co ...
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