It’s quite an accomplishment to finally be ready to make a mark in the industry, and see that all the hard work will soon pay off. It is a big leap you are taking, as far as your entrepreneurial goals are concerned.
You have everything in place – a great product or service, a dedicated workforce, a competent marketing team. You make yourself involved in every process, from serving or speaking to a customer, to doing accounting work to ensure all of it will turn out as you and your partners have hoped.
While this happy situation definitely calls for a celebration, there are certain aspects of running the startup that you need to know in order to avoid entrepreneurial mistakes many business owners make.
1. Lack of funding or contingency plan.
The sufficiency of your capital often gauges how your business will be like in the next 12 months and the years after. In this regard, you need to have a sound business plan that you need to update in case your business will need additional financial help or funding. With a good business plan, you need not sacrifice or compromise your own earning or savings to keep the business going.
2. Excessive optimism and high expectations.
Before deciding to open up shop, you and your partners have already identified and analyzed your market, put financial planning in place, and implemented strategies to meet client demands. The mistake, however, lies in not making any room for critical market changes that circumstances may bring about. Is your market size forecasting accurate?
3. Making “small” plans.
Avoiding expectations that are too high should not mean refusing to make contingency plans. It is not healthy to step away from challenges, because the business in itself is a risk. Planning on how to stay competent or beat the competition is one of the most recommended steps a new business is expected to take.
4. Ignoring the possibility of equity disputes.
Sure, your best friends “got your back”, but when it comes to serious business, equity agreements among founders must be iron clad. There should be terms relating to business equity distribution, just as agreements on profit sharing are put on paper.
5. Not getting a lawyer.
When starting a corporation, a limited company or partnership, getting a lawyer to is essential. Your experienced commercial attorney will help you comply with all the legal requirements and be sure your business is under the protection of the law. Learn about your attorney’s experience, specialization, bar associations and clients.