As an entrepreneur the possibilities for errors are endless: Like failing to file important compliance documents. Or overlooking an important tax filing deadline. How about blowing through all of your startup funding.
But here’s the good news:
Every mistake you make is a learning moment
Below are seven of the most common pitfalls startup entrepreneurs make when launching a new business.
Pitfall #1: Too Much, Too Fast
You’ve started your business and the adrenaline is flowing. Things have reached a fever pitch. You’re feeling ambitious and on top of the world. And yes, of course, you’re expecting immediate results.
“Next week we’ll be profitable,” you tell yourself. And then you realize your business is not where you wanted it to be.
When you find yourself in this trap, it’s important to keep in mind that we often OVERESTIMATE what we can achieve in “Year One” while UNDERESTIMATING what we can do in say Year Five.
The lesson here:
Mistakes are going to occur. So you may as well learn from them.
Pitfall #2: Not Having a Good Bookkeeping System
Here’s an often overlooked fact: Having a great bookkeeping system (i.e. keeping those receipts) will not only allow you to maximize your tax write-offs but save you a ton of headaches and extra CPA costs at tax time.
Today we have great online sites and apps that can assist with digital downloads of bank statements and receipts. So there are no excuses for not having a good system in place.
Pitfall #3: A Lack of Startup Funding
It’s well documented that the number one cause of business failure is a lack of funding and working capital. Therefore it is an important piece to get a handle early on in terms of what will it take to keep your business running on a day-to-day basis. Otherwise, this disconnect could lead to funding shortfalls that might quickly put your business in peril.
Your Secret Sauce for better funding outcomes: Learn about the importance of Cap Tables.
Pitfall #4: Poor Sales Execution and Growth Mindset:
As a startup, building a sales funnel can often lose importance in our list of priorities even though we are well aware of its importance. It goes without saying that this can lead to disastrous consequences.
Pitfall #5: Taking Shortcuts With Your Product or Service
The late inspirational speaker and thought leader Jim Rohn noted in one of his early seminars, “You get paid for bringing value to the marketplace, and if you’re not very valuable you don’t make much money.
The same is true for your business: The MARKETPLACE VALUE of your product or service is what will ultimately determine your business success. In other words, if you focus on all of the other details of your business versus working on the quality of your product or service, your business will likely see an early demise.
Pitfall #6: Lack of Strategic Direction
It is key to find your business sweet spot and stick to it. If you spread your energy and resources to thin trying to do it all, you will experience the Law of Diminishing Return and not be as successful.