Startup Mistakes

March 3, 2010

Ask an Expert
Ask an Expert

Mary Stewart Center for Entrepreneurship

Q: Steve - I have been watching the startup series you are part of at USA TODAY.  I was wondering if there are any typical mistakes that you see startups make that I can avoid. I am new to this entrepreneurship thing.  Thank you. -- Asa

A: It is never fun to make a mistake in business, even if they are inevitable. And worse, mistakes are both more prevalent and more dangerous during the startup phase of your business because your idea has yet to be fully cooked; the startup period is, unfortunately, usually the "error" part of a "trial and error" phase for you business.

That said, even though mistakes are to be expected, they need not be crippling, or even negative. Not a few entrepreneurs have stumbled into success when they discover ways to make money in their business that they didn't know were possible. For instance, Dr. Spencer Silver was trying to create a super sticky glue for his employer, 3M, when he mistakenly came up with an adhesive that was instead sort-of sticky. What to do with somewhat sticky glue? 3M created the Post-it note, that's what.

So no, not all mistakes are bad mistakes.

But there are some mistakes that can and should be avoided as you start your business:

1. Taking on too much debt. Most entrepreneurs have to take on some debt to fund the dream. That is expected and fine. But you simply must 1) keep that indebtedness to a minimum, and 2) have a plan for paying it back from the get-go.

It will take a while for that new business to begin to generate revenue, and while that happens your debt load will increase due to interest. And the bigger it grows, the more it threatens the lifeblood of your business, your cash flow. Keep your debt low and get out from under as soon as possible.

2. Having no marketing plan. As I am wont to say, starting a new business is like being alone in a dark room - you know you are there but no one else does. The only way to turn on the light, the only way to get people to know you are out there, is through marketing and advertising.

It need not be expensive. There are scores of ways to get the word out without breaking the bank - everything from tweeting to flyers to creating a viral video can work. In fact, over at my site, www.MrAllBiz.com, I offer a webinar called Marketing on a Shoestring (click Webinars on the homepage.)

Market and advertise your business, and then do it some more.

3. Not choosing well. This may sound a little amorphous, but it's not - it has to do with looking before leaping, and that is always a good idea in business. For instance, some people get so excited about a business idea that they don't really stand back and give it the proper, objective analysis they should . . . and then, for instance, they are surprised that the rent at their store in the mall makes turning a profit quite challenging, or that this franchisor is hell to work with.

Other examples of not choosing well include

Choose wisely, grasshopper.

4. Not having a great team. There are 20 million businesses in this country that are one-person endeavors - solo practitioners, freelancers, independent contractors and so on. That is all well and good, but it still does not mean that you have to be totally on your own, and you shouldn't be. The problem with being too independent is that there is not another person around to give you feedback and share the work.

So the important lesson here is to take advantage of the help that is out there:

Mistakes may be inevitable, but these ones are not.


Today's Tip: It is often true that businesspeople need forms, contracts, checklists and the like, but where do you get them? A new resource has opened that you may want to know about. DocStoc is an online marketplace of business forms that you can buy (or where you can sell your own) - everything from contracts to templates are available.


Back to "Ask an Expert"          MSCE Home            Batesville Memorial Public Library