Starting a business is a learning process, no matter how many times you might have done it before. Although it’s sometimes good to learn from your mistakes, you don’t want to fall into common traps if a little research and guidance can help you to avoid this. So, with that in mind, here’s our list of the top 5 mistakes made by startup entrepreneurs, and a little guidance on how to avoid them.
1. Not putting in the right amount of planning
There are entrepreneurs who totally underestimate the amount of planning it takes to get a business idea off the ground but there are also those who never quite make it to market and miss the window of opportunity to successfully launch their new idea. Neither are ideal.
Planning may get in the way of an exciting idea but it’s essential if you’re going to get it right. Every area of the business has to be researched, from understanding the size and opportunity in the sector to knowing as much as you can about your target audience. This needs to be balanced with accepting that sometimes you have to go to market without everything being perfect.
That’s why, at Streamlion, we offer a free initial consultation to all our prospective clients. It helps us – and you – fully understand the scope of the project and, as we support businesses at all stages of their startup journey and through their growth, we can make sure you’ve not forgotten anything.
2. Not prioritising money matters
Again, there are two ways business startup owners can make mistakes when it comes to money. Firstly, many simply aren’t aware of the raft of different funding arrangements that are available to them. Not having the right information at the start of their journey will instantly put an entrepreneur on the back foot. It’s impossible to plan a successful business if you don’t even know the scope of what might be possible.
Secondly, and perhaps for the same reason, entrepreneurs will often either spend too much, too soon or assume they need a huge amount of cash upfront in order to be successful.
Starting out on a business journey is stressful enough so we’d recommend working with an experienced organisation like Streamlion when it comes to accessing funding. Our previous experience speeds up the process and increases your chances of a successful application.
3. Neglecting the nuts and bolts of policy and process
Maybe because this is another ‘dry’ topic, but it’s surprising how many entrepreneurs take risks when it comes to things like legal protection, contracts and the implementation of proper processes. These things are like foundations for your business. Growing with them in place is a lot easier than retrospectively adding them.
Start by filing for the proper legal structure and business registration and follow this on by enforcing contracts, processes and protection from the outset. At Streamlion, we have helped many new businesses by optimising their processes and ensuring their business is efficient as soon as it is launched.
4. Failing to embrace change
For some business owners, their idea is their baby and woe betide anyone who questions it. Being too ‘in love’ with your idea can be a recipe for disaster as it’s likely this will lead to the wrong ways of working. It might mean you try to do everything yourself, so as to get things exactly as you dreamt them; you might become resistant to change and therefore unable to evolve when you need to or you could become over-confident and expand too quickly.
Whichever way you look at it, it’s always good to seek and consider the opinions of experts, whether they are a part of your team or someone you pay for advice and guidance. In our experience of change management, we have found that it is one of the most important things for a business to get right. The trick is – and this is where our experience comes in – to effect change with the minimum of disruption to the business.
5. Starting without considering the end of the journey
Every good business plan should have an exit strategy. If you feel certain of success, why would you not decide how you will maximise the benefit of that success? As part of the initial planning phase, it’s really important to scope out what you think success looks like and, therefore, at what point you might want to cash in and move on to your next project.
Of course, exit strategies don’t necessarily mean leaving the business. Many entrepreneurs like to keep a guiding stake, perhaps as Chair of the Board or as a non-executive director. Exit plans are particularly important if you’ve started the business with the help of an investor, of course, and your strategy for this will need to be a part of the initial plan requesting investment.
At Streamlion, we’ve worked with new and established businesses to understand the best time to sell and move on. We like to think of it as a succession plan for your business journey.
Ultimately, launching a new business involves some risk and every entrepreneur will view this differently. If you’re armed with research, plans and have consulted those whose opinions you value, you can at least make your risk assessment in a calculated way.