Avoiding the Pitfalls Common to Startups

Bruce Judson, author of Go It Alone was recently intereviewed in the Wall Street Journal:

The Wall Street Journal: What is the biggest mistake people make when starting a small business?

Mr. Judson: This might seem trite, but the most common mistake I see is that people think they have a great idea without testing it. Relatives and friends might agree that it’s a great idea, so [people] quit their jobs and invest money in it.

But asking friends and relatives is different than actually testing an idea. The true test of a business idea’s validity is if people you have no professional or personal connection to are willing to spend money on your product or service. You’ve got to find a low-cost way to test a product before diving in.

WSJ: What is the biggest misconception about starting a small business?

Mr. Judson: I’m constantly telling people, “Don’t quit your day job.” There’s a huge misconception that launching a small business requires all of your time. People think they need to quit their day jobs and spend 100 hours per week on something to be successful. It’s important to work out all the kinks before you rely on a business for income.

That’s why I’m a big proponent of starting a go-it-alone online business that you can run at night. That way, you can do it without the pressure of generating an income. Ten years ago, if you wanted to open a boutique, you had to hire a staff, rent a store and quit your job so you could be there all the time. It was a minimum investment of a couple hundred thousand dollars. Now you can start the store online, see if the merchandise sells and then decide to take the plunge. It’s worth sacrificing a little sleep to eventually change your life.

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