Entrepreneurs – no matter if they are first-time entrepreneurs or experienced ones – make mistakes. That’s the nature of business. However…

Entrepreneurs – no matter if they are first-time entrepreneurs or experienced ones – make mistakes. That’s the nature of business. However…

However… there are some mistakes that first-time entrepreneurs make really, really often.

Mistakes, which can be prevented. This article is exactly about such mistakes.

10 Most Common Mistakes First-Time Entrepreneurs Make

If you are a first-time entrepreneur, this article is a must-to-read. If not – it’s still worth to read, as you may make these mistakes even in your second, third, (…) business/startup.

Ok, so let’s go into them…

I can do everything on my own

Yeah, sure. If you have all the needed skills, most of the things you may do on your own. But there are at least two reasons why you shouldn’t do this:

  • It will take you a lot of time
  • Someone else could do it better

I’m not saying that there is no chance to build a company by only one person. There are a lot of examples that it is possible. But I would still recommend you not to try doing this by yourself and only yourself.

If you have someone to help (co-founder, employee, some volunteer, some external adviser like Sellers Playbook), your product may be made much faster, your business may grow significantly faster. In such a scenario you may focus on your specialization (whatever it is) and someone else could take care of something else.

If you have someone to help, you may build a much better “thing”/product/business/startup. The reason is simple: if you do everything by yourself, you don’t have enough time to do anything really good. You do something and in the meantime you already think about all the rest of the things you need to take care of. You try to finish something as quickly as possible, so you can take care of the next thing. And I’m pretty sure you know that quickly-done stuff often means shitty stuff. And the second thing is that someone else (who’s an expert in something, e.g. professional graphic designer) may do the same thing much, much, much better than you.

Here’s an article about how to find a co-founder for your startup.

A good product is enough

Unfortunately, it’s not enough. A good product is a good product. And nothing more. No one will find you just because you have built a good product. They will find you because you promote your stuff, because you try to sell it, you write articles, do interviews, podcasts, shows. Because you hustle. Hustle a lot.

First-time entrepreneurs often forget about that and focus on building product much more than on anything else. And that’s a huge mistake. If you spent a year on building your product and just building your product, that means that you lost a year of opportunities. You lost a year of building audience, promoting your stuff, sale, gaining feedback etc.

Good marketing is enough

No, it’s not. Like above – good marketing is good marketing. And nothing more. Sure, you need to have extremely good marketing. But even the best possible marketing won’t convince your customers to buy, if your product/service is shitty.

A good recipe looks like this: very good marketing (and sales) + very good product. There’s no place for something in between. There’s no chance you gonna win with only one of these components.

I can hire students (or non-experienced employees) and teach them everything

I made this mistake in my recent company – software house, that I was running in 2008.

As long as you don’t run a school or you don’t earn money on doing courses, working with non-experienced people is a huge mistake.

You will spend a lot of time teaching people everything, instead of building the business and making your customers happy. Sure, you will teach them everything and after two, three or so months they will be ready to do lots of things on their own, but until that time your company may be gone.

I’m not saying that you need to hire only rock-stars. If you would want to do this, you would need money. A lot of money. But as long as you don’t have people in your company that could teach them everything (so your company may still be growing once they’re learning), hire people who can help you build the business, not people who need your attention all the time.

I don’t need money to run a business

Unfortunately, you do. Having money is crucial for your business. That’s the biggest mistake I made in my software house – I thought that if I have lots of customers and projects, if my company makes a profit (on a paper), then everything is and will be fine.

Later on, I realized that if I don’t have money on my bank account, it means I have trouble. I need to pay taxes (even if I didn’t receive money from my customers yet), I need to pay my suppliers, partners, employees. I need to pay bills. And what looks really good on paper, may not be as good in reality.

You need to have money. Money on your bank account. To have the ability to pay for everything. You need to have cash.

You need to have money in front of you for at least a couple of months of running your business.

Underpricing is how I want to compete

There are way too many people who think that they can gain customers by lowering prices of their products or services. This mistake is made especially by first-time entrepreneurs.

They are not known by anyone yet and have no idea what to do to convince potential customers to become real, paying customers. So they go to such customers and tell them that they are able to offer them the same thing for half the price.

As a result, their company is not profitable (their costs are way bigger than income) and customers don’t receive what they need (because often it is not possible to deliver similar results or offer the same quality products/services for such a low price).

I don’t know how I want to earn; I will take care of this later

Everyone’s heard about Facebook, Instagram, WhatsApp, Twitter and all the rest of the companies which didn’t earn anything for a really long time. They raised a lot of money from VCs and were able to grow without an income. And that’s why lots of first-time entrepreneurs want to do the same. Raise as much as possible and don’t even think about earning anything.

That’s not a good way to do business. Companies should be made to earn money. You should run a business to earn money. Money, dollars, cash flow – these are words you should have in mind all the time.

On day 1 of your business, you should already know how your company will earn money.

Even if you are not going to implement it today or tomorrow. Even if right now you’re going to focus only on increasing user base – on the very first day, you should already have a plan to earn money.

I need an office, fancy car, tons of gadgets

No, you don’t need such things. You don’t need a car; you don’t need any gadgets. Even more so… you don’t need an office.

What you really need is money. What you really need is cash in your bank account. If you earn enough (or have enough cash on your bank account) to rent a place for an office – then rent it. If not – work remotely, from your home, from coffee shops, from your friends’ offices.

You don’t need all these fancy things to look professional. Seriously, you don’t need any of them.

The main goal you should have is to run (and grow) the business. If you have money to buy or rent something and that won’t hurt your company’s growth, then sure – do it. If not – forget about it.

I need to attend to every single event/conference/fair

No, you don’t need to. Conferences and all kind of events are really good for networking (here’s why). If you want to meet someone in person or you want to present something on stage.

But first-time entrepreneurs make two mistakes here:

  1. They try to be everywhere. That means that they waste a lot of time (and money) on being there, instead of being focused on building the product or business.
  2. They go to events without any plan. Instead of going there to meet this particular guy or the other one; instead of going there to sell something to the particular company; they are going there just to be there, because everyone else is attending.

I don’t need long-term (or even short-term) plans

Everything’s agile these days. Everything’s lean. Everyone talks about pivots, mistakes and failures. What’s the worst thing that could happen? You will fail. And it’s not so bad, because failure means that you learned a lot, that you gained experience. And next time you won’t make the same mistakes.

Yeah, all of that is true. But it doesn’t mean that you don’t need to plan anything, that you shouldn’t be prepared. You should always have a plan. You should always be prepared. You may change them later, if you decide to pivot. But you need to have clear path, clear goals in front of you. Goals for coming weeks, months or even years. What will your company look like in one year from now? And what about three, five or ten years from now?

You need to have a vision. The image of your company in a few years and a plan for what you gonna do to achieve it.

You should also read: What a day of an entrepreneur looks like?

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