What are the biggest mistakes made by startup entrepreneurs?

by WF- Enzo Administrator
34 replies
Running a business is tough, and more so when starting a business. Everyone makes mistakes, so dig in on the most common mistakes that startup entreps make.
#biggest #entrepreneurs #made #mistakes #startup
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  • Profile picture of the author Albertina Geller
    The main issue with entrepreneurs is that some don't spend enough money while some spend lots of money.
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    • Profile picture of the author Gary Handy
      When I started online, I found that I would end up straying into doing what I thought was better to speed up the process each time I sat out to do an internet marketing course.

      What usually happened at such time was that I would mess things up that would cost me a lot of money and time.

      Then I would return to following the instructions and prove that doing so was much faster, easier, and less costly. Many newbie internet marketers operate in this manner; they don't like playing by the book and follow instructions. Failure to follow instructions is one of the biggest mistakes startup entrepreneurs make.
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  • Collect market data for the stream of business, analysis of data and Risk calculation & mitigation plan is utmost important. Any GAP in this can lead to disaster.
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  • Profile picture of the author agmccall
    proper planning

    al
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    The Flu? Not worthy of a mention here???
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  • Profile picture of the author Monetize
    The biggest mistake that aspiring entrepreneurs
    make is doing nothing. The reason they don't
    do anything, besides procrastinating, is that they
    want to make sure everything is perfect, they want
    to get an MBA first, get a new computer first, or
    whatever. The thing to do is just get started doing
    something. Even if you fall on your face, you will
    learn from your mistakes and do some things
    differently the next time you start a business.
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    • Profile picture of the author d o
      I completely agree with you. I've noticed that most of the people who are successful in business with try a lot of things. Some ideas will fail and other won't.

      I am not one of those people, but I want to learn how to be. I currently work full time and am taking university web dev classes online. (html,css,javascript php, databases, ajax) I'll be done with those in Sept.

      Do you have any suggestion on how someone with little marketing experience should start, in order to get some real world web marketing experience on their own?
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  • Profile picture of the author Claude Whitacre
    Borrowing money, in place of gathering experience.

    So often I see newbies thinking they need to borrow money to start a business...without any experience in the business at all.

    Starting a coffee shop, without ever working in a coffee shop. Without even knowing if they would like owning a coffee shop.

    And borrowed money for startups usually goes to cover mistakes made. Mistakes that are completely avoidable, if the newbie would just study the business they are wanting to start.

    So they borrow thousands of dollars (maybe a second mortgage) lose the money in a few months, because the have no idea where to invest it in their business, and then the business fails...because they ran out of money...because they had no idea what they were doing.

    Most businesses, especially online businesses, can be started for almost no money. It takes study, asking questions of people already in that business, finding the right suppliers, learning what marketing works and what doesn't.

    You don't borrow money to start a business. You learn the business (the hard start ups are the most instructive), and after it's generating profit, you can borrow to increase the expansion rate.

    I've owned a few businesses in my life. None required a loan. All grew by investing profit back into the business. It's the slower...surer way.

    The second mistake I see is thinking the product or service is the business. Nope. The marketing and selling is the business. Marketing isn't a detail to be hired out. It's the entire business.

    If you start a business already knowing how to market and sell whatever it is you do...the business will succeed.

    I own a vacuum cleaner store. I used to speak at the convention every year. Once I asked the audience what business they were in. Universally they said "The vacuum cleaner business".

    I said "No. If you're successful...in the top 5%...you are in the "marketing of vacuum cleaners" business.. The marketing is what makes it successful, or makes it a business that is slowly dying. There are legends in our business. They are never legends because of their inventory control, or what brand they sell. They are legends because of their sales and marketing".

    At the convention, I would walk around listening to the conversations in the halls. Without exceptions, the people talkin about the actual product (and problems in the business) were the ones barely getting by. The rare groups talking about marketing, advertising, and selling...were the people in the money.

    I hope that helps.
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    • Profile picture of the author Gary Handy
      Originally Posted by Claude Whitacre View Post

      Borrowing money, in place of gathering experience.

      So often I see newbies thinking they need to borrow money to start a business...without any experience in the business at all.

      Starting a coffee shop, without ever working in a coffee shop. Without even knowing if they would like owning a coffee shop.

      And borrowed money for startups usually goes to cover mistakes made. Mistakes that are completely avoidable, if the newbie would just study the business they are wanting to start.

      So they borrow thousands of dollars (maybe a second mortgage) lose the money in a few months, because the have no idea where to invest it in their business, and then the business fails...because they ran out of money...because they had no idea what they were doing.

      Most businesses, especially online businesses, can be started for almost no money. It takes study, asking questions of people already in that business, finding the right suppliers, learning what marketing works and what doesn't.

      You don't borrow money to start a business. You learn the business (the hard start ups are the most instructive), and after it's generating profit, you can borrow to increase the expansion rate.

      I've owned a few businesses in my life. None required a loan. All grew by investing profit back into the business. It's the slower...surer way.

      The second mistake I see is thinking the product or service is the business. Nope. The marketing and selling is the business. Marketing isn't a detail to be hired out. It's the entire business.

      If you start a business already knowing how to market and sell whatever it is you do...the business will succeed.

      I own a vacuum cleaner store. I used to speak at the convention every year. Once I asked the audience what business they were in. Universally they said "The vacuum cleaner business".

      I said "No. If you're successful...in the top 5%...you are in the "marketing of vacuum cleaners" business.. The marketing is what makes it successful, or makes it a business that is slowly dying. There are legends in our business. They are never legends because of their inventory control, or what brand they sell. They are legends because of their sales and marketing".

      At the convention, I would walk around listening to the conversations in the halls. Without exceptions, the people talkin about the actual product (and problems in the business) were the ones barely getting by. The rare groups talking about marketing, advertising, and selling...were the people in the money.

      I hope that helps.
      Thanks a lot, Claude; you hit the nail on the head twice there; I have received 2 golden nuggets I'll never forget.
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      • Profile picture of the author Matthew Stanley
        Starting a coffee shop, without ever working in a coffee shop. Without even knowing if they would like owning a coffee shop.

        And borrowed money for startups usually goes to cover mistakes made. Mistakes that are completely avoidable, if the newbie would just study the business they are wanting to start.
        Ditto here. This is a very useful way to think about loans. It's counterintuitive to most, imo, that the slow grind of expertise through experience could actually be both less expensive and more efficient than endeavoring to 'skip the line' through borrowed capital.

        It's probably been done, but would be interested to see research on the success newbie restaurant franchisees have compared to those in the Chic-Fil-A (or similar) model which requires one to work at the store, or be "all in" in terms of managing it, before owning or operating one.
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        • Profile picture of the author Odahh
          Originally Posted by Matthew Stanley View Post

          Ditto here. This is a very useful way to think about loans. It's counterintuitive to most, imo, that the slow grind of expertise through experience could actually be both less expensive and more efficient than endeavoring to 'skip the line' through borrowed capital.

          .
          the grind does not really need to be slow ..but slow and fast are subjective terms when mostly all businesses have far different potentials for growth .

          now this might sound weird ..and my view ..is many skip developing the self awareness to figure out what kind of entrepreneur business person they are ..and are trying to play the role of an entrepreneur..

          but i have a Shakespearian view and think many people are putting much of their effort in to putting on a show/act ..trying to fake it until they make it ..rather than doing the things they need to do to mke it
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    • Profile picture of the author Diego Aguirre
      You are right in every way possible... Online businesses are the easiest to start because yes, you can get creative and launch with no money down...
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  • Profile picture of the author visimedia
    I think it's a really broad question.
    But in big picture, is this:
    -to differentiate the 'business' skill vs the 'technical' skill. e.g. running restaurant business vs cooking, it's 2 different things
    -managing cashflow, where the money comes from n outflow, budgeting
    -hiring the wrong people/team
    -leadership
    -finally, can't sell enough to break even , more importantly to make profit


    those 5 are very important stuff
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  • Profile picture of the author Odahh
    claude..you are correct that those are the biggest reasons ..

    i think one thing outside of most peoples awareness..is building the skills to sell products at high price points with good margins ..lower prices with lower margin need much higher volumes to get near the same profit

    with internet marketing or digita marketing ..you can turn the marketing into a source of income . but many try to make that the business ..
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  • Profile picture of the author Jason Kanigan
    Originally Posted by WF- Enzo View Post

    Running a business is tough, and more so when starting a business. Everyone makes mistakes, so dig in on the most common mistakes that startup entreps make.
    #1 problem I've seen in a decade of doing strategy calls with founders: they have nowhere near enough traffic to make the money they imagine making.

    Like a deficiency of 10X to 100X. They're beaten before they begin and don't know it. They'll bust their butt and put all that effort in, and they failed before they started because they needed say 500 leads coming in over the month, but got 30.


    Second issue noticed: founders coming up with customer avatars that only exist in one place--their minds. The customer doesn't actually exist. What happened is the founder had a brainwave, created an offer, and then went hunting for a buyer. This is the opposite of how it should work.

    Happens all the time in the SaaS field: software creators coming up with a program, then realizing they need someone to sell it to. They make up some unicorn avatar who doesn't really exist. Naturally, no one will buy the software.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by Jason Kanigan View Post

      #1 problem I've seen in a decade of doing strategy calls with founders: they have nowhere near enough traffic to make the money they imagine making.
      In a related field, something I hear all the time from a newbie is "There are two million businesses that can buy my product. If only 1% of them buy, I'll be rich".

      Or one we've seen on this forum very recently "If I put out 10,000 flyers, and only 1% of them buy...."

      Fever dreams from the very young.
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      • Profile picture of the author Odahh
        Originally Posted by Claude Whitacre View Post

        In a related field, something I hear all the time from a newbie is "There are two million businesses that can buy my product. If only 1% of them buy, I'll be rich".

        Or one we've seen on this forum very recently "If I put out 10,000 flyers, and only 1% of them buy...."

        Fever dreams from the very young.
        i don't see everyone who starts a business as en entrepreneur ..now that it is really easy to start a business ..and real entrepreneurs built the platforms ..new business can use to start ..without the huge amounts of money it require 20 years ago or more .

        during the dot com boom ..i believe many businesses with that business plan you mention got funded ..while Bezoz seeing the growth of the internet picked the easiest thing to sell over the internet ..books even if the goal was to be the everything store ..the start up phase was to dominate one market..

        maybe the biggest mistake of the start up entrepreneur ..is trying to skip the start up stage
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  • Profile picture of the author Mary Annabelle
    Rushing things to make money. When the money doesn't come as fast, they give up
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    • Profile picture of the author Diego Aguirre
      I see this very frequently
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      • Profile picture of the author DWolfe
        Originally Posted by Diego Aguirre View Post

        I see this very frequently
        Please use the Classic version and quote who ever your are talking to. It's under your user name, in the drop down tag.
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  • Profile picture of the author Lana AlBitar
    Sure. Starting your own business from scratch is quite challenging especially if you don't have a technical and business expertise or lack funding.
    If you are starting your own business and need technical and business support or you have a business idea that need validation.
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  • Profile picture of the author Alex Capra
    There are so many mistakes someone new can make. I think getting carried away with other stuff, trying to do too many things at once and plain just giving up are the worst things anyone can do. In a way, though I think people should make mistakes and I think they need to. The best way to grow is knowing where you've gone wrong and doing whatever you can to find a solution. I have made my own mistakes but I do try not to think about it too much now. My advice if I was to give it to anyone just try and stick to your one thing because if that one thing is what gets all your time etc. there's more chance of it being successful.
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  • Profile picture of the author sadakoid
    I think not being patient enough is a big mistake, we simply want to earn without even making any effort.
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  • Profile picture of the author superowid
    Mostly...
    • Inconsequent cash management
    • Improper planning
    • Wrong execution
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  • Profile picture of the author CruxisKnight
    The biggest mistake startup entrepreneurs make is investing money too fast trying to see if they can gamble their way to profits. They should be able to make use of free resources first and generate revenue with free methods before slowly transitioning into paid methods. This is especially with traffic. If you cannot be profitable with free methods first, there is a high chance you cannot be profitable with paid methods.
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    • Profile picture of the author Diego Aguirre
      I somewhat agree here, especially with the gambler's mentality thing... Regarding traffic, the free methods can be painfully slow and can cause to throw in the towel out of pure exhaustion.
      Paid traffic is much faster, BUT here's where the gambler's mentality kicks in.
      The importance of analyzing and optimizing based on numbers is key.
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  • Profile picture of the author DABK
    They cherry-pick the data when they come up with their plans. They end up thinking everybody's a client. Or have in mind a particular type of person, but that person will never buy from them.


    And they think their business is different. So, they fight me when I tell them things they do not like. My business is different.


    This is in addition to what Jason said. Yes, many come up with an offer, then go hunting for a buyer.


    But even when they do not do that, they mismatch things.


    Example: women who buy a particular type of shoe exists, but the best place to reach them might not be a churches' monthly magazine.


    Or, there are people who want to buy a house and get a loan to fix it up before they move into it but if you're licensed only in Florida, advertising on anything that's national wastes your money. Even if your cousin Bob got you a discount there.


    Another mistake I see: people do not plan thoroughly all the areas. The one they leave out the most: review things every now and again, to see what changes happened in your industry and what changes are likely to happen. And get ready.
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  • Profile picture of the author aaronrogers034
    Yes but if you can do it with out any investment it will be better but if you are investing then i think you cannot lose the money.
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  • Profile picture of the author zirkamer
    Lack of planning and execution. Breaking down the process in easy accomplished pieces. Commitment and funding are critical. Burning the bridge with job too soon. Bragging about what they are doing before seeing success. Lack of education about the niche/business they are entering into.
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  • Profile picture of the author bdover
    Even thou thousands upon thousands businesses like bars, restaurants etc. went down, people still believe that their bar is going to survive because they got crash course in businesses failures and because they have learned common mistakes causes , they are going to be invincible thus will succeed where others have failed.
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  • Profile picture of the author bdover
    Copycat hot money making business just because somebody have managed to make it hot.
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  • Profile picture of the author Graphic Prints
    Hiring an untrained staff having zero experience can be a biggest mistak
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  • Profile picture of the author Serene Carmen
    Build it and they will come.

    Believing a product will sell itself, and underestimating the amount to time and effort required to market the product.
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  • I think most people fall in love with their idea too hard that they fail to focus on other things, such as how their idea would apply to a range of audience. While this might be subtle, it usually leave a significant adverse effect on the business in the long term
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  • Profile picture of the author talfighel
    They don't believe in themselves.

    They see others succeeding but they don't see it for themselves.
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