Common Mistakes an Entrepreneur Must Be Cautious About

1. You Give up too Easily or Early

The most common cause of startup failure is that the entrepreneur just gets tired, gives up, and shuts down the company. Many successful entrepreneurs, like Steve Jobs and Thomas Edison, kept working on their vision, in spite of failures, until they found the success they knew was possible.

2. Maintaining Equal Partnerships

When starting a business, entrepreneurs tend to divide ownership equally among the partners. But while partners may agree in the early stages, disagreements will surely arise. Partners also often have different ideas about how much time to put into the business. Ensure that there is a defined leader with adequate authority to make final decisions and sufficient compensation to remain motivated.

3. You Focus Too Little on Marketing

4. You Think Legal Problems can be Solved Later

Many important legal decisions must be made early on. Neglecting to deal with these issues at the right stage can cripple a business. It's important to hire a skilled lawyer with experience in working with entrepreneurs. He can advise you on the next steps to take as you are growing your business. It can be much more costly and time consuming to fix the legal blunders you made later.

Viral marketing and word-of-mouth are not enough these days to make your product and brand visible in the harsh attack of new media out there today. Even viral marketing costs real money and time. Without effective and innovative marketing across the range of media, you won’t have a business.

5. You didn't Research the Competition

Having no competitors may mean that there is no market for your business, but if you can easily find ten or more existing players means this may be a crowded space. If you think "you have no competition," you're wrong. Competition is everywhere. Make sure you understand what these companies do and how you're different. If you find that you have several hundred competitors, it's ok to try something else.

6. You have an Inexperienced Team

Investors fund people, not ideas. They look for people with real experience in the business domain of the startup, and people with real experience running a startup. You must find a partner who has “been there and done that” so that there comes a balance between your passion and his experience in the team.

7. You don’t have an Intellectual Property

If you are planning to seek investors, or your idea is in the space in which big players are there, you need to register all your patents, trademarks, copyrights, and trade secrets early. Intellectual property is also often the largest element of early-stage company valuations for professional investors.

8. You pay for Things that could be Free

Spend 30 minutes researching the free alternatives to all the great paid products people will tell you about. Even good venture lawyers will give you free advice if you're nice to them. They know you can't afford them now but want to build a relationship over time.

9. You haven't Talked to Customers

The best entrepreneurs know their customers by name. Even web entrepreneurs, who don't typically meet their customers face-to-face, recognize their customers by their names. In early stages, you should talk to customers any time you're not building and testing product.

10. You don’t understand the Resource Requirements

A major resource is cash funding, but other resources, such as industry contacts and access to marketing channels may be more important for certain products. If you have too much cash but don’t know how to manage it wisely, it can be just as upsetting as too little cash. You must not quit your day job until new revenue is flowing.

11. Your Execution Skills are Weak

12. You Spend too Much Time on Product Development, not Enough on Sales

A great product is a necessary element to build a great company, but spending too much time building on it may lose customers to a competitor with a stronger sales organization. "If you don't keep one eye firmly focused on sales, you'll likely run out of money and energy before you can successfully get your product to market." Even if your product is faster, better, or stronger than the competition's, if it isn't what your customers want, then they won't buy it.

13. You Try to Keep Your Expenses as Low as Possible

The key to business is not to keep expenses low. Sometimes it is worth paying more rent if it will generate more customers, if it gives a better image and inspires confidence, if it helps attract the right employees or if it makes it easier to deal with suppliers.

An idea alone is really worth nothing. The most important thing is its execution. If you are not comfortable making hard decisions, taking risk, and taking full responsibility, you won’t do well in developing your idea into a business.

14. You Hire Someone You Know and Trust

Competence is more important than relationships. While hiring friends and relatives can work, it limits the talent and quality. Friends and relatives can also carry baggage. They can also be very hard to manage. So “if you can’t fire them, don’t hire them.”

15. Your Idea has Limited Business Opportunity

Not every good idea is a good business. Entrepreneurs often overestimate the size of their potential market. Just because you believe that your idea is great, and everyone needs it, doesn’t mean that everyone will buy it. So instead of going with your instincts or asking your friends and family, you must do a thorough market research about the feasibility of your idea.

16. Your Business Model Doesn’t Make Money

Even a non-profit organization has to generate donations to make up for operating costs. If your product is free, or you keep losing money on every one, it will be hard to make it up in volume. Even if you are providing a very great solution, but if your customers have no money, your business won’t last long.

17. You Don’t Have a Written Plan

A start-up that needs considerable capital to grow and more than a year to turn a profit should plan how much time and money it's going to take to reach there. You must spend time thinking through the key areas that make your business tick and building a model for three years of sales, profits and cash-flow projections. You should put some of your creative genius to prepare a business plan. By doing this you actually understand how to transform your idea into a business. Set both short- and long-term goals for the business, so you can check your progress along the way. Without a clear vision of where your company is heading, your great idea can get muddled along the way.

18. You Asking Too Many People for Advice

It is always beneficial to get input from experts, especially experienced entrepreneurs. But getting too many people's opinions can delay your decision and your company might never get out of the starting line.

19. You are Going for it Alone

It's difficult to build a successful business if you're the only person involved. It is very difficult to pay someone else at the early stage. The solution is to make sure there are enough margins in your pricing so that you can bring in other people.

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