Connect with us

Business Entrepreneur

Five very common mistakes entrepreneurs make

Published

on

The entrepreneur’s journey

Navigating the business start-up process, through funding and foundation building, into a high growth stage and to a potential exit, is a journey wrought with challenges. Every experience is unique – just as every founder is unique – but there are common mistakes we see throughout history. Understanding these pitfalls will help entrepreneurs overcome and avoid them. Knowing might not be half the battle, but it is a great start.

Below are five common mistakes that are repeated throughout the start-up world. Depending on how founders avoid and/or handle them can be the difference between a breakout business… and one that never realizes its potential.

1. Stay focused. A clean slate and a world of potential opportunity tempt young companies. Multiple customer segments seem within reach and diverse strategic partnership options promise to accelerate growth and open up new revenue, to name a few. Entrepreneurs need to stay focused on the company’s mission and strengths, though, and not chase every opportunity. Do one thing very well and not lots of things in a mediocre manner. A laser-focused approach almost always delivers a better customer experience, smarter decisions and a more successful company. Down the road, when the company has more resources, additional business opportunities can be built into the strategic plan.

2. Don’t daydream. Many founders see rival companies getting bought for millions and hear wonderful stories across their networks about big exits. Don’t focus on the exit. It’s the journey that counts. There is no substitute for hard work, customer focus and smart ideas. Selling a company is hard, and there aren’t many shortcuts (if any). Yes, your big exit can happen, but it won’t happen by dreaming. You have to grind it out.

3. Don’t be stingy. Many founders are very focused on minimizing the equity they give to key employees and partners as a business is starting up. It is a big mistake to concentrate too much on equity percentages as a business is in its infancy. Being generous, for the right people and in the right circumstances, almost always pays dividends. As a business grows, of course the compensation becomes more regimented and less equity is given. At the beginning, though, provide a big incentive for your team, and yes even at the cost of your own percentage. The theory is that 50% of a strong exit is a hell of a lot more than 90% of nothing.

4. Stay focused on your customers. As businesses grow, and add smart people with good ideas, the focus often shifts from the customer to internal developments. Founders and employees fall in love with technology projects, new streamlined business models and/or the new really cool website being designed by an expensive firm that previously was unaffordable. The commitment to customers, and what those customers find most important, can be overlooked. Don’t let it be. Your customers are and always will be the most important part of your business, and you need to make sure that your business remains focused on them.

5. Know your limits. Entrepreneurs are used to doing everything, to trusting themselves and no one else, and to making all business decisions. The time when a founder has to give up some control is often the most difficult inflection point in a business. This can mean handing over the CEO reigns to a more seasoned executive, but it does not have to mean giving up control. In all situations, though, entrepreneurs have to start to trust others. Bring in sales, finance, technology and/or operations talent and trust it. There are people with more skill and/or experience in some areas and they are needed to accelerate growth and add security for the business. Founders need to focus on what they do best, even if it means stepping back.

It is amazing how often in our world people forget or ignore the past, and history repeats itself. From bubble economies to fallen empires, it seems inconceivable yet it keeps happening. The start-up world is no different. These mistakes happen every day, even to many of the smartest and best entrepreneurs in the world. Businesses that can avoid them are taking a big step towards success.

As always I look forward to your feedback. Have I missed any common mistakes that you have seen repeated in the start-up world?

Hoyt David Morgan is an entrepreneur, angel investor and business strategy leader. He is an investor and/or adviser to a handful of exciting and high growth companies, and has been a part of several high-value exits. He is passionate about customer experience, smart business and helping innovative companies grow... and sailing.

Continue Reading
Advertisement
33 Comments

33 Comments

  1. Phil Boren

    January 25, 2012 at 7:34 pm

    Hoyt: I think you pretty much covered one of my pet peeves in #4, but it's basically "Continue to Execute". So often, early execution is one of the driving forces behind start-up success, and almost equally as often it fades into mindless meetings and "planning to plan" strategy sessions, i.e. internal focus. I also think #5 is critical, but it's easier said than done for so many Type A's. Good post.

  2. James

    January 26, 2012 at 3:55 pm

    Don't spend all your time reading guides on how to be an entrepreneur on the internet.

    James

Leave a Reply

Your email address will not be published. Required fields are marked *

Business Entrepreneur

Here’s why you shouldn’t start a startup

(BUSINESS ENTREPRENEUR) Building your own startup and being your own boss sounds tempting, but be sure you make these considerations before starting out.

Published

on

Man at a whiteboard outlining his startup plan.

2020, a year for our generation that will most likely be marked in infamy for decades to come. At least I hope that this is the bottom of the barrel, because if there’s even further to go… Those fallout shelters are starting to look homey.

A lot of people, myself included, are looking for different options for new careers. Maybe it’s time to place some faith in those back-burner dreams that no one ever really thought would come to fruition. But there are some things about starting up a new business that we should all really keep in mind.

While you can find any number of lists to help you to get things going, here’s a short list that makes beginning a new business venture a monumental effort:

  • You need to have a unique idea with an impeccable execution. Ideas are a dime a dozen. But even the goods ones need the right business-minded person behind it to get things going for them.
  • Time, time, and more time. To get a startup to a point where it is sustainable and giving you back something that is worthwhile, takes years. Each of those years will take many decisions that you can only hope will pan out. There is no quick cash except for a lottery and you have to be extra lucky for those to get you anything. This whole idea will take years of your life away and it may end in failure no matter what you do.
  • You have to have the stamina. Most data will show you that startups fail 90% of the time. The majority of those are because people gave up on the idea. You have to push and keep pushing or you’ll never get there yourself. Losing determination is the death of any business venture.
  • Risk is a lifestyle. To get anywhere in life you have to risk something. Starting a business is all about risking your time and maybe your money to get a new life set up. If you can’t take risks for the future then you can’t move up in the business world.
  • Bad timing and/or a bad market. If you don’t have a sense for the market around you, which takes time and experience (or a lot of luck), you won’t make it. A keen business sense is absolutely necessary for you to succeed in a startup. Take some time and truly analyze yourself and your idea before trying something.
  • Adaptability is also a necessity. The business world can be changed at the drop of a hat, with absolutely no warning. Rolling with the punches is something you have to do or every little change is going to emotionally take a toll on you.
  • Lastly, not all of this depends upon your actions. If you start something that relies on investors, you’re likely going to get told “no” so many times that you’ll feel like it’s on repeat. Not everything is dependent upon your beliefs and whims. You need to be able to adjust to this and get people to see things from your point of view as well. But ultimately, it’s not all about you, it’s also about them.

These are just a few ways that starting a startup could stress you out. So, while the future could be bright, stay cautious and think twice before making any life changing decisions.

Continue Reading

Business Entrepreneur

Restaurants: Going digital is simple with these tools

(BUSINESS ENTREPRENEUR) In 2020, restaurants going digital is critical. Luckily, it’s also easy, safe, and may even save you money.

Published

on

Restaurants prepares delivery or to-go food for safety

So, you own or manage a restaurant and you have yet to “digitize” your menu for COVID-era safe ordering? No problem! Transitioning your menu and service to the virtual realm has never been easier. There are a ton of options for restaurants to choose from to keep your customers feeling at-ease, your front-of-house staff happy, and the whole service experience streamlined for all parties involved.

A free app with over 500 restaurant partners and 5k+ active users, AAHI is a user-friendly platform that uses QR codes to share menus and NFC for contactless payments. AAHI boasts a 25% order increase for participating restaurants and who can say no to that, especially during these tough times. Additionally, you’ll be cutting down on operational costs by around 30% (better tech equals less need for servers!), and your laid-off staff will be able to collect unemployment if they need to.

Another free (up to 200 views a month) app with an emphasis on curbside pick-up is Orderlina. Customers scan a QR code, which takes them to the same menu they would see if they were going to eat in, making it an integrated experience. A bonus is that the app links your menu to your social channels. I always say, free marketing is never a bad thing! Plus, you’ll be more likely to gain followers and receive micro-content from satisfied customers. Win-win!

Especially with winter right around the corner and outdoor seating becoming an increasingly limited option (especially depending on where you live), everyone in the industry is eventually going to have to make the shift to digital – the question is when. Physical menus have become a thing of the past. Not only are they potential vessels for spreading COVID-19, but if you are using disposable paper ones, you’re undoubtedly creating unneeded waste. Same goes for the exchange of cash, or card payments that require contact. Good riddance!

The common goal across the entire industry right now is to stay open and bring in capital in whatever capacity possible, while also maintaining a healthy staff and a pleasurable, safe experience for patrons. That’s going to require some adjustment and creativity compared to service pre-COVID. By converting to digital, you are putting your best foot forward into the uncertain future for the restaurant industry.

Continue Reading

Business Entrepreneur

Scientifically check your risk for burnout with this free quiz

(BUSINESS ENTREPRENEUR) This new tool lets you take a free self-assessed, science-based burnout test to give you an idea of how much self-care you need.

Published

on

Woman with face on table suffering burnout in front of computer.

Concerns of keeping self-care and mental health in a positive spot – specifically in relation to burnout – have been a hot topic of discussion. While COVID-19 has exacerbated these concerns and stress levels, the issue of burnout has been around for quite some time.

Work burnout is often discussed within terms of work-life balance. Simple ways to avoid that crash are enforcing a hard stop on reading or responding to emails at a certain time of evening, or to continuously clean your workspace. Easier said than done, but it is critical.

But sometimes you have to look at the nitty gritty. Sometimes you have to ask difficult questions about your job and your personality in order to understand how burnout is impacting you. This can now be done with Global IT Burnout Index, a free, science-based assessment to tackle your stressors before it’s too late.

This is geared towards people working in tech (as the website reads, “burnout in tech is high and real”), but is useful for any industry.

To begin, you simply start the quiz and answer a few questions about yourself and your job (e.g. “I find it difficult to relax after a day of work” and then you answer based on how strongly you agree or disagree).

There are 10 total questions, and no personal information is asked (no name or email). It is open data, meaning it will help people on the other side better understand burnout; but, it’s totally anonymous.

The quiz takes no longer than 2 minutes. At the end, it will give you a number out of 6 measuring your burnout rate. The higher the number, the more likely you are to experience burnout.

Burnout has the ability to manifest physically and mentally, and can take a toll on your body and mind. Knowing if you’re experiencing high amounts of activity that can lead to burnout can help you know if you need to take precautions to change things in your life or job.

For those of us working from home, the situation is a Catch-22. You aren’t currently forced into a stressful commute. But it’s harder to pull yourself away when 5pm (or whatever your end time is) rolls around.

For people in the office or on site, it’s the same thing. You get to socialize (safely, obvi) with your coworkers, but there’s those on-site pressures.

No situation is perfect, but understanding if you’re in a situation where you could use a change or some help is incredibly important – especially these days.

Continue Reading

Our Great Partners

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!