Entrepreneurs, whether new or experienced, often make critical mistakes when starting a new business. Some of these are so serious that their startups are essentially dead on arrival.
That’s clearly bad for them, but it could be good for you if you too are a budding entrepreneur just itching to start the business of your dreams. Learn from their mistakes.
Inside every failure lies a valuable lesson, said life-long entrepreneur and bestselling author Parviz Firouzgar. “Sometimes you can learn as much from people’s failures as you can from their successes,” Firouzgar says. “Those mistakes teach lessons that can lead to long-term success.”
Avoid these five common mistakes if you hope to succeed.
1. Preparing yourself out of existence
Many people with great ideas spend months, sometimes even years, preparing. They always have one more seminar to attend, one more vendor to interview, endless meetings, and endless planning. They never get around to actually starting their business because they are too focused on trying to create the perfect plan.
There is no such thing as a perfect plan. Even when you think you’re done, the business environment will have changed enough by then to make your plan out-of-date.
Seasoned entrepreneurs don’t procrastinate; they get out there and launch, learning and adjusting along the way.
2. Planning endless sources of revenue
Don’t try to do it all. Another common mistake is to attempt to create an endless number of revenue streams. If you try to offer something for everyone, branching out in so many directions that your original product idea becomes just one of many, you’re doomed to fail.
What do all great companies throughout history have in common? They all started with one innovative idea and then became the best in their field. They focused on their original product or service and nothing else.
If you want to sell cell phones, then don’t start out by also offering calling cards, selfie sticks, and apps. The trick is to do one thing and do it really, really well.
Once that is profitable, then you can add a related product. But don’t go into business with a shotgun approach. It never works.
3. Establishing equal partnerships
Partnerships based on perfect equality and good intentions rarely work. If each partner’s opinion carries equal weight, then trouble is around the corner. Surprisingly, big decisions are rarely the problem. It’s the little ones, like the design of a logo, which may cause disagreements that can spiral out of control. Emotional attachment and ego sooner or later get in the way.
The only way to guarantee the success of a partnership is to divide the company into functions and assign responsibility for each based on the partner’s expertise (marketing, accounting, human resources, etc.). Decisions should still be made together in the spirit of teamwork, but if there is disagreement then someone has to have veto power. Put it all in writing and leave nothing to chance.
4. Relying on right-brained thinking
The business world is the domain of left-brained action, involving reason, structure, planning, goal setting and organization. The creative and intuitive contributions of right-brained thinkers are just as important, but in business there is a key distinction.
We use both parts of our brain to some degree, but are clearly dominated by one half. Someone dominated by left-brained thinking can function solo in the business world, but right-brained dominated thinkers generally cannot. They should have a left-brained partner to provide the required balance and organization.
5. Making money your prime motivator
If you go into business only for the money, your chances for success are dramatically diminished. Even if you do make it, you might end up as one of the wealthy who are as miserable as can be.
The prime ingredient for success is to enjoy what you do because that is what you’ll be good at. Find a business that interests you, that generates enough passion in your soul to motivate you to get up in the morning, wanting to learn more and get better each day. Do what you love and make a living doing it. The money will follow and your chances for financial success will multiply.
Some things in life cannot be taught and you have to experience them yourself, Firouzgar said. But your learning curve can be vastly accelerated with the right knowledge up front.