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Mistakes are not uncommon among entrepreneurs, old-timers, and first-timers alike. The only difference is that it is the first-time entrepreneurs who make the most mistakes - and naturally - because building a company from scratch is not exactly a walk in the park.
Small businesses have a failure rate of 50- 70% within the first 18 months. To help you learn from those who have been in the thick of it, Business Insider
has come up with a list of the most common mistakes first-time entrepreneurs make, and some helpful pieces of advice to boot.
1. Picking the wrong co-founder.
One of the big responsibilities as you start a new business is choosing a partner. This decision will make an impact on your business in terms of equity and satisfaction, so it is always best to choose someone you can work with and who will be able to complement your skills.
2. Not understanding the skills needed to be CEO.
Being a CEO requires particular sets of skills - one for starting a company, and another for growing it. As a founder, you need to be firm, articulate, and capable of carrying out decisions and have passion and a clear vision. Furthermore, you need to understand every single process and protocol, from human resource policies to international partnerships.
3. Trying to make a product for everyone.
When you try to please everybody, you end up wasting a lot of time and energy trying to figure out what people want. Invest your time in your product or service, focus on making it specific and not like everything else out there.
4. Obsessing over the competition.
If you spend too much time obsessing over your competition, your product or service will eventually become its copycat version.
5. Not learning every side of the business.
The best entrepreneurs are the ones who understand that in addition to being good leaders, they also need to understand the tech, sales, product, and marketing areas of their company.
6. Running out of cash.
Most first-time entrepreneurs fail to realize that money is constantly going out the door, and without sales or financing, you will eventually run out of cash and be forced to cease operations. What you need to do is to guard your money by creating budgets, keeping receipts, and tracking expenses. You'll be in a more favorable condition when you know where your money is going. First focus spending on customer acquisition, hiring, and employee productivity.
7. Getting too emotionally attached.
Don't get too emotionally attached to an idea especially if there are signs of it not working. Getting emotionally attached to an idea makes you lose objectivity.
8. Not hiring the right fit.
Of course, you will want to hire talent from big companies, but this does not mean that these hires know how to manage by influence. Most big company managers are used to managing by hierarchy, which kills the early stage, highly collaborative culture, and therefore leads to rapid and iterative decision making.
9. Not getting feedback from your customers.
Establish a good and lasting relationship with your customers by turning to them for validation. Without a satisfied customer, your company wouldn't exist, or survive.