Entrepreneurship is a fascinating adventure that everyone thinks of taking at least once in their life, but there a few that that the step. Regardless of the passion with which you may start your venture there are very high risks of failure if you do not execute things correctly.
Here are the most common mistakes that first time entrepreneurs make that you should avoid:
1. They Fall Too Much in Love with Their Idea
NerdWallet describes this phenomenon by quoting Susan Scherreik in their article “The most common mistake is that they fall too in love with their startup idea…. Carried away with the idea, the new entrepreneur overlooks how and when he or she can actually execute this idea and turn a profit.”
Your idea may have potential but the success depends on the execution. If you cannot execute your idea properly you might be heading for failure.
2. They Do Not Test the Market
“Without testing the market to see if your product is even a viable option to your potential can lead to months, if not years of wasted time and money.” says Leonard Kim in his article. It is extremely important to test your product and get feedback from your target market before starting a business. It will help you save time and money that you might spend on a product that is not the need of the market.
3. They Are a Single Founder Startup
Being a single co-founder company has a lot of drawbacks. Not only does it mean that you have to do each and everything on your own, but this also makes it difficult to raise funding and find investors for your venture. As Ashish Das mentions in his article, “Investors don’t put their money on ideas because there are hundreds of people with the same idea of yours; they invest in the team.” Finding the right co-founder will not only raise your chances of getting funding but it also gives you a helping hand, reducing workload and stress.
4. They Hire Unqualified Staff
Just as finding the right co-founder, you also need to recruit the right people for your startup. “Your early employees must have the right skills, but equally important they must have the right personality and attitude to help you build the company and environment that you want to create.” says David Greenberg, founder and CEO of updater.
Many entrepreneurs think it will be better to hire anyone who is affordable regardless of whether they have the required skill set or not. Don’t make that mistake!
5. They lack in Cash Flow Management
Vivian Giang explains this by quoting George Kelleman in her article, “First-time entrepreneurs often fail to realize that every second of every day costs money. Whether it is rent, salaries, overhead, utilities, or whatever, cash is constantly going out the door, and if you cannot bring cash in (through sales or financing), then you will eventually run out of cash and the game is over.”
It is important that you create budgets, track all your income and expenses to know where your cash is going, if you want your startup to succeed.