It’s the time of year for gift giving. Everyone is racing around trying to find the perfect gift that will make someone else’s face light up. Here at The Business Law Group we are giving out one mass gift: the gift of knowledge. It seems like a common theme that comes up in conversations with us is the question what are the biggest mistakes that entrepreneurs make. New entrepreneurs want to avoid them and current entrepreneurs want to know that they are not alone or if there is something they should be looking out for.
To begin with, it should be obvious that each Grand Rapids startup and each West Michigan small business is unique and face unique challenges so these common mistakes do not apply to all and if you avoid just these mistakes does not mean you are in the clear. So without further ado, here is our gift to you:
Mike Suman, the owner of Product and Market Development, the author of “Should Your Idea Become A Business?” as well as a developer and innovator of more than 50 patented products, listed the 5 great mistakes by startups as:
Many of these are lessons we have tried to convey in our blog. For any business to succeed there needs to be a market for the product being produced. You can have the greatest innovation ever conceived but if there is no one out there that is willing to buy your product or service then it’s just a cool idea and not a business. At the same time it’s important for entrepreneurs to be in touch with not just their market but their competition too. Trade shows allow you to see if your idea has a place in the market and to see how your product fits compared to the rest of your competitors.
Funding always seems to be on the forefront of most new entrepreneurs. Their priority list seems to be first to get an idea and then get money to develop that idea. The problem is in that case you are taking on debt for idea that might not even become a business. Many entrepreneurs find that their idea needs to be adjusted as they go through the development process. These adjustments delay the time in which your small business becomes profitable which delays the time you can pay back creditors. If those creditors are family members or friends, that can create tension (especially around the holiday season).
The team you place around you is important and seems to go hand-in-hand with letting ego get in the way of your business. While it might seem like a good idea to partner with friends and people that will agree with us, at the end of the day these people have the same weaknesses as we do and that means more chances for mistakes. A good CEO will surround himself with people that are not afraid to disagree with him and give him a different perspective. At the same time, that CEO will listen to those dissenters. The best decisions you will ever make are the ones where you admit that someone else is right.
These mistakes might seem simple but they are very common. Entrepreneurs have a tendency to get a little bit of tunnel vision when it comes to their startup. That is not always bad but sometimes that focus on what you are doing and where you see things going means you can lose track of the things that will make you successful. And in an industry where the difference between success and failure is razor-thin, why would you want to risk it?
Source: “Prolific inventor Mike Suman shares five startup pitfalls” by Mike Nichols of Grand Rapids Business Journal.