1. Don’t Underestimate a Business Plan
If you’re not seeking outside funding at the start, it’s a must writing out a formal business plan. However, taking the time to write out your business plan, forecasts and marketing strategy is a particularly effective way to hone your vision. All planning should center around two essential questions: How is my business serving a particular need, and does this represent a major market opportunity?
In addition, don’t overlook the exit strategy at the beginning. Do you want your children to take over the company? Do you want to sell it? It’s critical to think about these questions from the start, as the building blocks of your company (such as legal structure) should vary depending on your preferred final outcome.
2. Don’t Get Stuck in the Past
While our previous experience certainly gave us a leg up the second time around, with the past exp.You will know the market landscape had changed dramatically since our first company.
The marketplace and your business plan are living entities; they’re continually in flux. Whether it’s your first company or fifth in a given market, you’ve got to keep asking: What do we need to do today?
3. Don’t Hire Friends
I form bonds quickly and make fast friends with people around me. While I generally consider this a positive trait, it has created some difficult situations when running a business. At times I have been reluctant to let employees go even though I know it’s not a good fit. If things aren’t working out between an employee and startup, it’s time to put feelings aside and trust that the person will find a better situation elsewhere.
Unfortunately, I’ve also learned that people can let you down, ranging from laziness to fraud. I still believe that faith in people is a good thing. However, blind faith can bring trouble.
4. Don’t Fall Into a Discount Trap
At the beginning, too many young companies feel the pressure to heavily discount their prices in order to win business. While customer acquisition is important, attracting customers at unsustainable price levels will just result in a race to the bottom. After all, raising your prices on goods and certain services can be a tricky proposition. I’ve learned that you’re better off in the long run focusing on how to bring more value to customers, rather than simply slashing your prices.
5. Don’t Be Afraid to Fail
Someone said “The greatest barrier to success is the fear of failure.” An entrepreneur’s path is uncharted and sometimes a little bumpy. It’s easy to get stressed or downright panicked, but you cannot let fear prevent you from following your dreams. Think of it this way: the sooner you fail, the closer you are to discovering what works.