There are so many common mistakes that entrepreneurs make that it’s possible to write several books on the topic. In fact, it would be like shooting fish in a barrel to name a bunch of the most commonly made mistakes. In fact, I’ve made a few of these in my career, and will share them with you, so you can learn from my mistakes. Fortunately, we have recovered from them, and are doing well, but it would have been nice to have not made them in the first place. So without any more fuss, I’ll show you where people commonly go wrong, and where I’ve made silly mistakes.
Common Mistakes Entrepreneurs Make
- Underestimating what it takes to start. I’m a believer that you should outline how much you think it will take to start the business, and run it until you make a profit. Multiply that number by at least 5. That will give you a better idea of how much things are going to cost before you start actually making money. Customers take longer to find and acquire. Everything takes at least twice as long as you think it should. I know it has for us. And that’s with me working 16-18 hours per day.
- Expanding too quickly. It is awfully easy to hire people. But each person you bring on brings overhead, and unless you have revenue, and a strong business case for each person, you can be driving yourself into the ground that much faster.
- Buying the wrong equipment — in either direction. It is so easy to cut corners and not buy the necessary equipment. It’s also equally easy to talk yourself into buying super nice equipment, because “you’ll need it”. One way will end up costing you in time, and the other will end up costing you in cash. And cash is king in business. We’ve fought for weeks with recalcitrant laptops and equipment before biting the bullet for better hardware. And that was after spending the money on the cheaper stuff in the first place. Had we gone for the middle of the road hardware, the first time, we would have saved ourselves time, aggravation, and cash. Lesson learned.
- Renting an office that’s too nice. In our case, we actually did our research, and discovered that we are not required by law to have an office, so we’ve saved that money. But I’ve seen so many people who get stuck in super-expensive leases that end up drowning them.
- Keeping the wrong people. Letting people go can be very, very hard to do, because this is their livelihood too. We made the mistake of holding onto people who just weren’t the right fit for the culture we want to create, because we didn’t want to let them go. Lesson learned — fire early.
What these five have in common
Look at the list again and there’s a pattern in it. Every one is a decision made to avoid a moment of discomfort now, which then costs considerably more later.
Underestimating the money is easier than facing what the real number would mean. Hiring too fast avoids the discomfort of being stretched. Buying cheap equipment avoids the flinch of the bigger invoice. And keeping the wrong person avoids one very unpleasant conversation, at the price of months of a bad fit affecting everyone else.
That is worth knowing because it tells you where to look for the next one. The mistake you are currently making is probably sitting behind something you have been putting off — which makes it a leadership problem rather than a business one.
Like I said before, I could go on for weeks on mistakes that entrepreneurs make. Learn from mine, and don’t make them yours.
