Starting your own business is no easy feat.
In fact, it’s one of the most challenging things you can do. Your level of personal preparation can’t prevent it: you will make some mistakes along the way. After years spent starting and running several businesses, I have compiled a list of 10 common mistakes with clues on how to avoid them. As Bismarck said, the wise man learns from others’ mistakes. So be ready to learn – even if this is no guarantee that you won’t fall in these traps, or many others.
1. Underestimating competitors’ ambition
Many entrepreneurs make the mistake of underestimating their competition. They think that because they are starting a new venture, they necessarily have a first mover advantage and that their competitors will be content to stay where they are. However, this is often not the case. Competitors can be just as ambitious as you are and may even have more resources at their disposal. A good idea, along with its materialization, is never a shield against competition in a dynamic market.
Be sure to research your competitors carefully, understanding their strengths and weaknesses. Only then can you develop a strategy for countering them and keeping your edge.
2. Timid pricing
Many entrepreneurs make the mistake of pricing their products or services too low. They do this for a variety of reasons but the most recurring is a strange belief that customers will primarily go for the budget option.
Pricing your products or services too low will usually hurt your business in the short run. When you charge too little, customers will tend to question the quality of your product or service. In addition, you may not be able to cover your costs or make a profit – especially if you’re selling at a loss.
Once again, a good starting point would be to figure out how much similar businesses are charging. You should also consider the cost of production and make sure that you’re covering all of your expenses. Once you have a good understanding of the market and your costs, you’ll be able to set a price that meets both your needs and those of your customers. Remember that not all costs are evident at first sight (people, for example, tend to forget about taxes…)
3. Moving only towards an ideal
When starting a business, it’s important to have a clear idea of your goals and what you hope to achieve. In other words, to follow an ideal. Which is perfectly fine and most times, necessary. However, our minds tend to get accustomed to an idealized vision (what Dr Jordan Peterson calls « a low-resolution solution », opposite to high-res which is a materialized project) so much that we can disconnect from reality, wanting only to reach an idealized vision.
Business is a game of adaptation. This means being willing to make sacrifices along the way and always looking for ways to improve. The big picture is always mutating, I advise you to take pleasure in observing these transformations. In the end, what you want is solving problems in the world in a creative manner, not setting things in stone.
4. Considering all opinions the same
One of the biggest mistakes entrepreneurs make is considering all opinions the same. Just because someone has an opinion doesn’t mean it’s valid or helpful. In fact, most people have opinions that are based on very little actual knowledge or experience.
When you’re first starting out in business, you don’t have the luxury of knowing who to listen to and who to ignore. But as you gain more experience, you should start to be more discerning about whose advice you take. One way to do this is to look at their track record. If they’ve been successful in business themselves, then it’s likely that their advice can help you more than one coming from friends and relatives, whose activities are remote from yours.
Another way to tell if someone’s opinion is worth listening to is by considering how well they understand your specific situation. If they don’t really understand what you’re trying to achieve or the challenges you’re facing, then their advice is probably not going to be useful.
Remember, not all opinions are created equal. The key is learning how to identify which ones are worth listening to and which ones aren’t.
5. Mistaking oneself with the client
Somewhere along the way, entrepreneurs forget their target client and start developing an offer that pleases themselves. When you’re starting a business, it’s easy to get caught up in your own vision and forget who you’re actually trying to serve. But if you want to be successful, it’s essential that you have a clear understanding of who your target market is and what they want. Otherwise, you’ll never be able to create a product or service that meets their needs. Hence the success of « client-centric » approaches.
To avoid making this mistake, take some time to really think about who your target client is ; even if a persona will never be a 100% accurate. What are the demographics? What do they like and dislike? What do they need from your product or service? Once you have a good understanding of your target market, you can start creating content and marketing strategies that will appeal to it. Make the client the seed of the process.
6. The lure of the quick buck
The lure of the quick buck can be hard to resist for entrepreneurs. After all, who doesn’t want to make a lot of money quickly? However, chasing after the quick buck usually is the shortcut to big mistakes.
For one thing, going after the quick buck can cause you to sacrifice long-term sustainability for short-term gain. This can lead to burning through your cash reserves too quickly, leaving you without the resources you need to keep going. Typically: these drop-shipping gurus who underwent a terrible hangover when Facebook changed its advertising algorithm in 2018, as they got used to spending tens of thousands a day on ads (as they grew accustomed to quadruple their investment for some time).
It can also lead you to make decisions that are not in the best interest of your business. For example, you might cut corners on quality or customer service in order to save money and make more profits in the short term. However, this will likely come back to bite you down the road when customers start leaving in droves.
So, while it’s understandable to be tempted by the quick buck, it’s important to resist that temptation and focus on making decisions that are in the best interest of your business’ long-term success.
7. Wanting to reinvent the wheel
Humans have a strong taste for innovation and complexity : this helped our species thrive. They see a problem and think that they can come up with a better solution than anyone else. So, they try to reinvent the wheel instead of looking at what has already been done.
This can lead to them wasting time and money on something that may not even work. It’s important to remember that there are already solutions out there for most problems. And, chances are, someone has already thought about the solution that you’re trying to come up with. Ask yourself: from what inner-place does your need for disruptive processes come from ? Is it a lack of self-esteem ? Remember that true innovation, just like many creative endeavors, cannot be ordered: it usually comes from hard-work and intuition – moments of grace.
So, before you start trying to reinvent the wheel, do your research and see if there’s already a solution out there that you can use. If not, then go ahead and try to come up with a new idea. Never waste your time and money on a specific problem that’s already been solved.
8. Equating passion with profit all the time
This one is a variation on point 5 (mistaking oneself with the client) which has its roots in the self-help industry who sold the idea that the key to happiness in life was to monetize your passion or hobby.
Many entrepreneurs make the mistake of assuming that if they are passionate about something, they will automatically be successful in making money out of it. Unfortunately, this is not always the case. While it is true that being passionate about your work can make you more likely to succeed, there are many other factors involved when it comes to making a profit. Passion alone is not enough to guarantee success and can sometimes be a dead-end street, making you tired of the subject you loved so dearly, while at the same time bringing no substantial revenue. I know many successful entrepreneurs who religiously keep a hobby on the side, safe from monetary implications. At the end of the day, you want to relax and entrepreneurship is stressful.
So anytime you are tempted to turn a passion into a business, ask yourself whether you’re ready or not to add stress and market adaptations into it.
9 Undervalue one’s time
You might think that because you enjoy what you’re doing, you can work long hours without burning out. This mentality can eventually lead to a burnout, which will harm both your business and your personal life. To avoid this, you should make sure to take breaks, schedule time for yourself, and delegate tasks when possible.
There is a form of guilt associated with free time and relaxation: entrepreneurs think about their friends in the infamous « rat race » and can have a hard time accommodating to the « liberty » that the way they chose advertises. However, liberty comes at the cost of increased responsibilities and we are mortal creatures (although we can be hard as nails). Your time is as valuable as anyone else’s and I recommend you to learn to respect it. It will pay dividends in wellness and, in the end, what is the point in succeeding if you are no longer here to enjoy it ?
10 Having a hard time delegating
You need to be obsessed to be an entrepreneur and this obsession has a downside: the hell of micro-management and control. There is this scene in Martin Scorsese’s Casino where the lead character played by Robert De Niro gets up from a restaurant’s table and yells at the cooks because there is not an equal amount of blueberries amidst the muffins that are served. He has an eye for details and his job is to maintain the Tangiers – the Casino he is running – as the leading one in Las Vegas.
We all have, to some extend, similar tendencies in our businesses. One solution, when you want to delegate tasks, is to break them down into the smallest bits possible. Usually, we think that the person who will do it is « smart enough to get it » and we end up disappointed when he or she doesn’t perform properly, even ending up questioning their intelligence. This is the wrong way to look at the problem. We get so caught up in our mission that we forget that our ways of thinking belong to us only. We are dealing with other individuals. Breaking a process down into bite-sized pieces not only makes its completion easier for collaborators; this also is a zen-like exercise in taking a step aside from ourselves and observing the logics behind our processes, gaining a chance to improve them – thus helping our business.
