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founder and CEO of ERG EnterpriseNationally recognized thought leader on entrepreneurship, investment and leadership.
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According to Bureau of Labor Statistics data, one in five start-up businesses will fail within the next 24 months. When it comes to certainty, entrepreneurship doesn’t afford much.
We entrepreneurs are taught what to do to bring our ideas to life. Make a business plan. Work on our pitch. get funding. From A to B to C.
But neither school nor the internet can teach you the mistakes you should never make as an entrepreneur, the mistakes that limit your chances of success not just in your current venture, but in your career as a business builder. .
Therefore, if you want to start a business, this article is worth reading. In it, here are his five biggest mistakes new founders make. Avoiding them will increase your chances of success. Let’s dive in.
Mistake #1: Believing You Can Do It
When I built my first business, I relied on many people. Mentors, investors, partners, employees, the list goes on and on. I learned that entrepreneurship is as much a social discipline as an intellectual one. As a result, I began devoting chapters in my first book to common misconceptions found among new aspiring founders. It supports the belief that individual talent alone can build profitable companies.
I have met hundreds of founders who fit this category who have pitched to my private investment firm, ERG Enterprises. And all left our office without funding. why? Because business doesn’t rest on someone’s shoulders. They grow through many investments. Businesses need financial capital to accelerate their growth. But far more important than that are the human variants of knowledge, talent, and creativity.
Believing you can start and grow a successful company on your own is vanity, not the science of entrepreneurship. After all, entrepreneurship is we,not myself.
Mistake #2: Starting a Business Outside of Your Specialty
If you’re in an MBA program, you’ll no doubt hear advice to “stick to your specialty.” My career could have been very different had I chosen business over medical school. I probably would have stayed with just the hand surgeon.
However, this advice is also valid in the very specific situation of building your first business. At that time, we are tasked with learning the profession of entrepreneurship. We need every edge we can get.
Mistake #3: Finding the Wrong Partner
Co-founders are an important aspect of most startups. I’ve never had one, but I’ve invested in many startups that have ended up with notable successes. The biggest difference between the former and the latter is the marriage between the co-founders. Failed pairings were not in line with the company’s long-term vision, while the opposite was true for companies that fell into the successful category. Bottom line: Be careful when choosing a partner. As with any marriage, understand their goals and aspirations and make sure they align with your goals before entering a relationship. included.
Mistake #4: Setting Wrong Expectations
I think entrepreneurship is the most rewarding profession. I also think it’s by far the most challenging. This role doesn’t mean automatically stepping into an exciting lifestyle that brings excitement, wealth, and respect. In fact, it’s the exact opposite. Work harder for less money than a full-time job, at least in the early stages. Sign up for sleepless nights, bouts of self-doubt, and moments of intense pressure. These often last for years with no guarantee of reaching their intended destination.The rewards of being an entrepreneur are great, but they can also be disappointing.
That is why it is important to understand and be fully aware of the realities of this profession before signing up. That means, for example, setting the right expectations by confronting common misconceptions about having more free time, being your own boss, and getting rich quickly. Recognizing the harsh realities of this profession gives you the best chance of success.
Mistake #5: Focusing on Multiple Ideas at Once
We have all met individuals with many ideas for starting a business. Every day we inspire new products and companies. One business pivots to another, pivots to another, and so on. These transitions occur whenever founders face the inevitable resistance that all entrepreneurs encounter. Great ideas are attractive and exciting until reality points out their shortcomings. At that point the hard work really begins. As this cycle continues, founders consume precious time, energy, and capital without measurable progress on the business itself and the critical skills and knowledge to build it from the ground up.
I believe that entrepreneurs starting a business should stick to the exit. It could mean a sale, acquisition, or failure. Each path offers important lessons for entrepreneurs that will help them in their long-term careers. But when you switch from idea to idea, you change yourself without gaining experience that will help you in the future.
Increase your chances of success
Like any successful entrepreneur, I have made countless mistakes. This is the reality of a profession with no guardrails and no clear path to progress. But not all mistakes are created equal. The mistakes reviewed in this article limit your chances of becoming a successful entrepreneur. They are completely avoidable.
By avoiding them, you increase your chances of building a successful company and getting a return on your time, effort, and sacrifice. Statistics show that the profession is difficult enough. Every advantage should be taken advantage of.
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