Top 10 Mistakes of an Entrepreneur

I don’t have a problem with making mistakes. In an entrepreneur’s life mistakes are life lessons. In only recent years have colleges and universities offered entrepreneurial classes. Traditionally we had to learn through mentors, readings and ultimately our mistakes. I’ve made my fair share of mistakes and I offer them to you as a lesson to consider.

1. Having poor cash management:

Too many businesses operate on a shoestring; in fact the biggest contributor to business failures is lack of capital. I understand that all start-ups operate cash-poor, but there’s a difference between being cash smart and down right stupid. Don’t let finances rule the path of your idea. Time is always on your side so be patient with progress and plan, manage and always watch your cash flow.

2. Doing it for greed:

An entrepreneur’s job is never lonely. If successful they would have involved other people’s time and money. Doing it all for money will selfishly affect those that you have involved in your business. It’s ok to use money as a gauge for success, but it’s not alright to fuel your greed for money through your business. This might mean that you need to give up a good proportion of the company, but think of it this way – it’s better to have a small piece of the pie then none of the pie.

3. Not having clear goals:

What do you think would happen if a captain of a ship didn’t have his route mapped out before leaving the dock? What about if he continually changed direction throughout his journey, would his crew have any confidence in him? A company is much like a ship, and like a ship without direction it is likely to crash. Establish clear goals by preparing a clear business plan with a mission and vision statement guiding the direction of your company.

4. Thinking that YOU are the company:

I’m a strong believer that you are only as good as the people you surround yourself with. Like your professional team, build a strong team within. Consider your team as your company’s blood line; without it being strong your company cannot thrive.

5. Not having focus:

I’ve been there before….. one idea on Monday, another on Tuesday, two more before the weeks out. Each idea better then the other! At some stage you need to stop and focus. If you wholeheartedly believe that any of your ideas have legs, focus on taking that idea to the market. Let the market decide whether you should pursue it further or consider another idea.

6. Not doing enough market or product research:

Just because you and a handful of your friends think that your idea is brilliant, that doesn’t mean your product will sell in the market. Have conviction of courage; do the research and if the public doesn’t like your idea then shelve it.

7. Failing to build a professional team:

More often than not start-ups lack funds, but that shouldn’t mean that they should commit suicide by being their own financial and legal advisor. The business world is tough and there are too many sharks out there to risk your idea or business. If you can’t afford the time and money to employ professional accountants and lawyers then shelve your idea for a day when you can.

8. Failing to consider international intellectual property protection:

Patents are considered on a country-by-country basis. It’s often the mistake of an entrepreneur to file a patent application in their home country but neglecting to expand that patent around the globe. At least the American authorities have realized this characteristic of entrepreneurs; granting a years grace after an invention is sold or made public. The rest of the world isn’t so kind.

9.Thinking a shareholders agreements are only for large companies:

Don’t let arguments between shareholders hold your business back. Failing to establish a shareholders agreement early on will see your fellow business owners argue over who’s worth what rather than serving their purpose; to build a profitable business.

10. Not knowing when to let go:

Your ultimate goal as the founder of any company should be to control the company not run the company. I’d rather be the largest stock holder of Microsoft than the CEO of Microsoft. Know when to let go. Allow managers to do what they do best (manage processes) so you can do what you do best (create ideas).