SCORE Small Business Blog

Startup: 3 Mistakes to Avoid
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Business mistakes happen, but these three can be avoided


It is never fun to make a mistake in business, even if they are inevitable. And worse, mistakes are both more prevalent and more dangerous during the startup phase of your business because your idea has yet to be fully cooked; the startup period is, unfortunately, usually the ‘error’ part of a ‘trial and error’ phase for you business.

That said, even though mistakes are to be expected, they need not be crippling, or even negative. Not a few entrepreneurs have stumbled into success when they discover ways to make money in their business that they didn’t know were possible. For instance, Dr. Spencer Silver was trying to create a super sticky glue for his employer, 3M, when he mistakenly came up with an adhesive that was instead sort-of sticky. What to do with somewhat sticky glue? 3M created the Post-it note, that’s what.

So no, not all mistakes are bad mistakes.

But there are some mistakes that can and should be avoided as you start your business:

1. Taking on too much debt: Most entrepreneurs have to take on some debt to fund the dream. That is expected and fine. But you simply must 1) keep that indebtedness to a minimum, and 2) have a plan for paying it back from the get-go.

It will take a while for that new business to begin to generate revenue, and while that happens your debt load will increase due to interest. And the bigger it grows, the more it threatens the lifeblood of your business, your cash flow. Keep your debt low and get out from under as soon as possible.

2. Having no marketing plan: As I am wont to say, starting a new business is like being alone in a dark room – you know you are there but no one else does. The only way to turn on the light, the only way to get people to know you are out there, is through marketing and advertising.

It need not be expensive. There are scores of ways to get the word out without breaking the bank – everything from tweeting to flyers to creating a viral video can work. In fact, over at my site, www.MrAllBiz.com, I offer a webinar called Marketing on a Shoestring (click Webinars on the homepage.)

Market and advertise your business, and then do it some more.

3. Not choosing well: This may sound a little amorphous, but it’s not – it has to do with looking before leaping, and that is always a good idea in business. For instance, some people get so excited about a business idea that they don’t really stand back and give it the proper, objective analysis they should . . . and then, for instance, they are surprised that the rent at their store in the mall makes turning a profit quite challenging, or that this franchisor is hell to work with.

Other examples of not choosing well include

  • Partners: Before going into business with someone, do a project or two together. See if your styles are compatible. See if you think about money and growth the same way.
  • Vendors: A contract with a bad vendor can doom your business.
  • Bad location: It could be too expensive, or maybe it is too off the beaten path.

Choose wisely, grasshopper.

Steve StraussFounder, TheSelfEmployed.com and MrAllBiz.com
Steven is one of the world’s leading entrepreneurship and small business experts. He is a lawyer, public speaker and author, speaking around the world about entrepreneurship. He has been seen on CNN, CNBC, The O’Reilly Factor, and his column, Ask an Expert, appears weekly on USATODAY.com.
www.theselfemployed.com | www.mrallbiz.com | @stevestrauss | More from Steve

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Discussion (3) Comment


  1. ClareVisitor

    Partners: Before going into business with someone, do a project or two together. See if your styles are compatible. See if you think about money and growth the same way. I wished I would have seen this before


  2. ClareVisitor

    I wished I would have done what you all suggested up there: Partners: Before going into business with someone, do a project or two together. See if your styles are compatible. See if you think about money and growth the same way. This would have saved me time, money, and a friendship!

  3. These three areas – finances, marketing, and having a solid business idea — are critical and should be evaluated by all business owners.

    A SCORE client recently tried to hire me to help her promote her new online business. I say “tried” because I turned her down. As a small business owner myself, I know how hard it is to turn away business but, ethically, it was the right thing to do.

    This SCORE client has a great looking website — lots of photos and pages — all very well laid out. At first I was excited about helping her. Then I approached her website as a customer would. Her business model didn’t make sense. I could have helped her create a comprehensive social media strategy that would have driven tons of visitors to her website. But, when visitors got to her website, they would not have been converted to customers because her product (actually a service with a very little tangible product) wasn’t clearly defined and didn’t have a value equal to the price she wants to charge.

    We discussed her business goals and objectives (which she didn’t have clearly defined) and decided that she would spend more time with her SCORE counselor refining the business idea before she would hire me. I hope to work with her as soon as she solidifies her product offering. With a solid foundation, we can then build that comprehensive social media strategy she wants and needs to her drive traffic to her website.

 

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