Five biggest mistakes to avoid when starting a new business
At HubRunner, we work with a lot of folks who are starting a new business. From these experiences and through the process of building our own company, we’ve learned a lot about what makes a new entrepreneur successful right from the beginning. In this post, we’ll share five of the most important lessons to help an entrepreneur get started with the best chance of success.
Lesson 1: Don’t take too long to launch, but validate your idea first.
Validate & Refine Your Idea
So, you’ve come up with a business idea and you’re ready to get started. The first step is to validate your idea by testing it conceptually and practically. First, identify some experts whose opinions you can gather; they’re sure to have some valuable insights to help you sharpen your idea. Second, validate your idea practically by engaging with some potential customers. Even if these are friends or family members, pitch them on your idea and take notes about the questions they ask and the concerns they have. This research will help you determine if your idea is good and if there’s a strong enough demand for your product or service.
Get Over Fear of Theft
A lot of entrepreneurs believe they should remain quiet so nobody steals their idea. Of course, there are cases in which you should remain confidential about your business (for example, if you are seeking a patent). However, speaking with people about your new business at the earliest stages is one of the best ways to help you refine your idea and get to market faster. You’ll identify where there are problems with your idea, and how to solve them; doing so before launching is very, very important.
Once your idea is refined, don’t take to long to launch. Simply identify the features that are adequate to deliver your product in the simplest possible form, and launch as soon as you’re ready to do so. This early market experience will help you refine your pitch, your product and your strategy.
Lesson 2: A customer acquisition plan is more important than a business plan.
Do not launch your business until you know how you will acquire customers. Instead of wasting your dime writing a long, wordy business plan, research your target customer and identify ways to engage with them.
Also, it is critical to start your enterprise with a specific customer in mind. We recommend reading Duct Tape Marketing for a clear guide to identifying your target customer, your core marketing proposition, and more.
Lesson 3: Don’t start up with inadequate resources.
Be realistic about the funds and other resources you need to get started. Then, increase your estimates even further: everything costs more and takes longer than you expect (except, of course, a HubRunner website!). When you’ve gathered the resources you need to get started, put yourself into the “miser mindset.” Constantly decreasing expenses is very important when you’re starting out; think critically about every expense to decide if it’s absolutely necessary and whether or not there’s a cheaper option.
Also, think hard about your human resources: do you need a partner? Having a partner in your new business can help in many important ways. A partner will help share the work load and will help keep your spirits up during challenging times. But, only choose a partner who you can absolutely trust!
Lesson 4: Don’t operate in a vacuum once you’ve started.
Seek Criticism & Take it to Heart
Make sure you’re communicating with your early customers about their experience with your company. Don’t be offended when they offer criticism; instead, figure out how to apply their input to make your business stronger. In the process, you’ll probably get some positive testimonials as well, which you can apply throughout your website and marketing materials!
Get out in the world and tell people about your business. Seek out industry experts and attend networking events. Don’t just tell yourself to do this, actually add it to your to-do list and onto your calendar. Also, when engaging in networking situations, offer something of value: write an article and offer a printed version, or author a white paper and offer to email it to your new acquaintances.
Lesson 5: Be patient and know when to adjust.
There are many, many great quotes about how “overnight success” takes many years. Reaching large numbers of your target customers will take time, in part because there are so many other products and services fighting for their attention. Fortunately (if you apply Lesson 2 above!), you’ll be getting enough customers to grow once you’ve launched. In the mean time, keep gathering information from your customers and from ongoing market research so you can adjust your product, your features and your messaging on a continuous basis.
Have some other ideas about important mistakes people should avoid when starting a new business? Let us know in the comments!