Business Opportunities Weblog

April 28, 2005 by Dane Carlson | 8 Comments

Excellent article on the Microsoft Small Business Center about some all to easy to make mistakes that can kill a new entrepreneur’s startup:

• Mistake 1: Driving a fire engine without a route. You always hear how entrepreneurs need “passion” to succeed — the so-called fire in the belly. Well, enthusiasm can be overrated. To fan startup flames, you need more than high energy. You need a plan.
• Mistake 2: Selling way too cheap. Ask a child to choose between 12 rhinestones and one diamond and she’ll go for the rhinestones every time. Startup owners are just like that. They fall for the fallacy of quantity over quality. They figure rock bottom prices will fuel skyrocketing sales and they’ll become millionaires. But it doesn’t work that way.
• Mistake 3: Starting a business just for the thrill of it. Entrepreneurs tend to be big-picture types — visionaries, risk-takers, thrill seekers. The longer they must sweat the details, the jumpier they get. So they often engineer a crisis, just to get back in the game and feel the rush of adventure.
• Mistake 4: Clueless about marketing. Startups rarely plan or budget for marketing because new owners think marketing is an unnecessary expense. Or, compounding the error, they confuse marketing with sales.
• Mistake 5: Being a pal instead of a boss. At launch, everyone works three or four jobs seven days a week. There seems little reason to pull rank or worry greatly over management procedures.
• Mistake 6: Blowing through your capital. “New business owners grossly underestimate their financial needs,” says Isidore Kharasch, president of Hospitality Works, a food-service consulting firm based in Deerfield, Ill. Typically, inexperienced owners overspend at the outset, buying more furniture, technology and office supplies or hiring way too many executives or experts than they really need to get up and going.
• Mistake 7: Overlooking your loved ones. Startups demand 80- to 100-hour workweeks and serious support systems. They also “require significant time commitments and financial sacrifices, both of which can strain a relationship,” says Victor Sim, a lawyer at Squire, Sanders & Dempsey in Los Angeles.

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