Being a successful entrepreneur takes a lot of work, research and some luck. Even though hard lessons can be the best teachers, why not learn from the mistakes of others who've already walked down a similar path? It's the sign of a good businessperson, which is of course essential no matter what your entrepreneurial pursuit. Here are some of the most common mistakes newer entrepreneurs make, why they're made, and how to avoid them:
1.) Not Having a Nest Egg
Around 2009 when the Great Recession kicked off, a lot of people got the push they needed to start their own business when they were laid off. This was when unemployment was somewhat readily available, the demands to keep your unemployment were moderate at best, and extensions were widely available. These entrepreneurs got thrown in the deep end, but they were equipped with life rafts in the form of unemployment. You need to make sure you are prepared for hard times.
"Maybe you have unemployment and maybe you don't," says Steve Hoffman, founder of San Francisco-based incubator Founders Space. "Either way, you need to build at least a year's worth of income just in case so you can focus on your entrepreneurial pursuits."
2.) Trying to Do It All
There will be (many) times when you'll have to wear multiple hats, but don't sign on for it because you think there's nobility in suffering, or that you'll be more effective by multi-tasking. Studies show multi-tasking doesn't work and actually shrinks your brain. You're skilled at a few things that are crucial for a business. However, it's simply impossible for you to be the best manager, SEO guru, web developer, bookkeeper and human resource manager all rolled into one. Hire wisely, delegate, and don't micro manage.
3.) Choosing a Field You're Not Passionate or Knowledgeable About
You've heard that home automation is a booming business and you want a slice of it. However, your background is in salon management and what you really love to do is nail art. Make sure you try to match your interests, passions and experience with your new venture. Otherwise, it may become clear you don't really care about it and that may extend to how your clients see it.
When Inc. columnist John Rampton started Pixloo, he wasn't passionate about the project. He says he launched the project and immediately realized that it wasn't what he wanted to do. It was successful but still didn't capture his full attention or enthusiasm. He says he later sold the company for pennies compared to what he thinks it could have potentially sold for.
4.) Thinking It'll Be Easy
You've read all sorts of success stories. Your friend's cousin talks about the ease of his entrepreneurial success. When you watch "Shark Tank," it seems clear that angel investors are supporting ideas that surely aren't as compelling as yours.
Slow down a sec. There's a reason most small businesses fail: It's exceptionally difficult. Get ready to work harder than you ever have before, with virtually no time off.
5.) Working Too Much
Keeping number four in mind, don't fall into the trap of actually working around the clock. You'll burn out, stop producing your best work and start hating your venture. If time management is a struggle for you, carve out certain times each day where there's a no-work zone. Aim for at least one day per week that's work free. This will preserve your sanity, relationships and hopefully your business.
You will make a lot of mistakes--after all, this is brand new for you. Learn lessons where you can and keeping forging onward. Dedication might be what it really takes for you to succeed.