Anyone who has ever started a business can recall at least three mistakes that they made and later learned from. Meridith Dennes shared her top three mistakes for Project Eve.
Dennes wrote that she made the mistake of paying too much for formation. Dennes’ company shelled out a $5,000 retainer to a top Wall Street law firm to handle her company’s formation papers. One 6-minute phone call with the firm ate up the retainer, and then her company dug themselves deeper into a hole by hiring another large firm in the Silicone Valley, when she could have saved thousands by using the online service Rocket Lawyer.
Her second mistake was hiring a graphic designer to also do coding. Lesson learned: hire one graphic designer, one coder, and review their portfolios, and references. Mistake number three for Dennes’ company (and most) was not setting milestones and due dates for projects. There’s a saying that, “a goal without a due date is merely a dream,” and for many companies it also means a great number of painful failures.
We would like to add a few more mistakes to this list:
1. Not hiring or contracting with the right team of individuals early enough. If you need help with business development, office support, social media, or bookkeeping, get help as soon as possible. If not you will find yourself drowning before you even get into the ‘race’.
2. Not having a realistic business plan. Some people either have extremely lofty and weighted business plans that eventually become overwhelming and too far fetched, or they have such loosely written business plans that the words scream, “no ambition!” The business plan is your road map, so follow it, modify it when necessary, get professional help developing and reviewing it, and look for a quality business plan writer not just a cheap one.
3. Quitting your day job too soon. Too many times people quit their job too quickly to chase their dreams of entrepreneurship. That same job that provided a stable weekly, biweekly, or monthly income (oftentimes with benefits) gets scrapped for the romanticized idea of ‘being your own boss’ and having so-called ‘freedom’ and ‘extra time’. What most people don’t realize is that entrepreneurship means more work, more work hours, less personal time, an unstable environment usually for the first 5-10 years, inconsistent pay, and sometimes low or no benefits (i.e., medical, dental, life, vacation, sick pay, etc.) for several years.
Keep your day job until your startup is paying you a consistent income every month (for at least 1 year) that doubles or even triples your salary from the 9 to 5. Yes, that means you will need to hire, outsource, or contract with someone to help you run things while you juggle both responsibilities. But guess what? It’s better to share that piece of pie than face shutting down your company and hitting the unemployment line because you miscalculated the potential growth of your startup. Look at your 9 to 5 job as an investor in your business and future. It is helping to provide a sense of stability during an unstable and unpredictable period of time in your business and life.
4. Not having a board of advisors or mentors. This isn’t just for the startup phase but throughout the entire life of your company, you need to have at least three people that you can turn to for professional advice. Creating an official or unofficial board of advisors can be extremely beneficial as they help you steer and navigate through the untimely storms that all businesses face. Don’t wait until the storm hits to seek counsel, turn to those individuals who are specialists and experts in business, finance, management, business development, customer and partner relations, etc. and ask them to sit down with you in person, over the phone, or virtually, and help you with both small and large issues that can and will impact your company.
Did your company have any bloops and blunders early on that you would like to share? What advice do you have for startups?
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