Imagine learning how to speak a foreign language without ever killing grammar. Imagine learning how to cook without ever burning or oversalting food. Those may be impossible, but we can learn what serious grammar mistakes we should avoid, and we can see what we shouldn’t put in a recipe all by observing other people.
We can apply the same understanding to business: you’re certainly going to learn from your own failures, but observing where others have fallen before can save you from several traps and put you on the right path.
That being said, here are some common (dangerous) mistakes entrepreneurs make that you don’t need to repeat—because learning not to fail without having failed is a double win.
1 – Focusing too much on developing and too little on selling
This might be the worst one in this list because it’s the one with the greatest potential to destroy your business. The fact is cash flow is the number one reason why businesses shut down, and if you don’t focus on selling, the cash won’t flow in—no matter how good your product is.
“Forgetting to sell” can strike as an absurd mistake that nobody would make, but it’s what we do when we don’t invest in a solid marketing strategy to sell our idea. It’s what we do when we don’t create an ad campaign, build an online presence or make an effort to connect with potential customers.
Perhaps people make this mistake because of the misconception that if a product is good enough, it can sell itself. It can’t, though. Customers already have the competition available, and it’s you who has to make yourself known and relevant.
Certainly, product quality is crucial because it helps increases client retention. But we can’t forget running a business basically means selling something, either a physical product or a service. If you don’t sell, you go out of business. It’s that simple. Designing an amazing product that you forget to sell won’t benefit anyone.
2 – Being impatient about results (but slow during the process)
It was Fred Brooks, a renowned computer architect, who said, “The bearing of a child takes nine months, no matter how many women are assigned.” And just like a child, a business takes time to grow—a period of time we are unable to skip, no matter how hard we work.
Ironically, we tend to be impatient with business growth, yet tolerant with the small counterproductive moments in our days. Watching random videos, answering unimportant text messages and many other things that should wait creep into our work time, and when combined with long lunch breaks and pauses, rob us of the time we need to work. In the end, they can amount to hours of unproductive time every day. It’s those things we should be intolerant of.
Some processes can be directly sped up. For example, onboarding customers doesn’t require manual effort. Automatizing emails that include surveys and links to your calendar is can truly boost efficiency. The time spent on manually emailing new clients will be free so other areas get your attention.
Gary Vee highlights how we should be patient with the whole process (macro patience) while moving fast at all times (micro speed). In short, work hard and productively every day to make each day count, but remember businesses take months and years to grow.
3 – Underestimating yourself and your product
It doesn’t matter if you start small and in disadvantage, hold your head high and never underestimate your brand. That can easily happen because you are new to the market (or maybe simply young). And the negative effects are many.
The first one is lowering your own price too much. Selling too cheap is a way of saying, “I’m not as good as the others.” If average bed and breakfast establishments offer their services at $150 in a city, offering yours at $50 will make people imagine the worst about your service. Plus, your revenue will be too low to continue. Price it fairly and walk into the market as a force to be reckoned with.
Another consequence is moving too slow because you don’t really believe your product makes a difference. If you really believe in the product, you will move quickly because you know there’s no time to waste. Being a startup doesn’t mean being inferior.
4 – Not spending money enough (or overspending)
Both extremes are deadly: you spend either too much or not enough. Let’s start with the bigger one: not spending money. That can surprise financially conservative people, but the truth is some entrepreneurs overemphasize frugality and don’t reinvest profit in growth-related areas.
Advertising leads to growth, so be generous. Product quality leads to growth, so don’t be stingy with “ingredients.” The same goes for wages: good professionals don’t come for free, so good people in key areas need good pay. Everything that helps your business grow deserves money. It’s not waste; it’s an investment.
The opposite extreme also exists: some people develop an uncontrolled spend culture (spending on what doesn’t cause growth), and that can hurt profit, even if their revenue is impressive. This is especially true if you are funded by venture capital.
If that is your case, then be careful not to allow yourself and other team members to take investors’ money for granted. Consider cost-efficient alternatives (such as automating processes to save on salaries). It also helps to have backup cash for emergencies or small expenses that appear along the way. Automating processes should help you save on salaries. But whatever makes you grow and turn a profit in the long run deserves your money.
5 – Not having defined roles
In a small startup, everyone ends up doing a bit of everything. Honestly, I even think the first hire should be someone who can wear different hats. But in order to scale without losing control, we can’t go on being generalists.
To begin with, professionals need to focus on what they excel at so productivity is maintained. Also, it’s harder to control certain processes if everyone gets involved. Team members may count on someone else to perform a task they’re supposed to be responsible for (such as handling accounting), and in the end nobody did it. In other words, accountability is lost.
That also means underperformers and lazy employees will never be questioned, and brilliant members will never be rewarded. And an unnoticed achiever will lose motivation—or simply leave.
In the end, making mistakes is part of every entrepreneur’s journey, but avoiding the common ones is possible. That will make sure you have your own customized problems to deal with while sidestepping these big ones.