The number of new businesses launched each year is steadily growing, yet the five-year survival rate is dismal. With 12 years of coaching entrepreneurs under my belt, I can confidently say that many of these failures can be avoided. I see the same mistakes over and over again; each new entrepreneur convinced that somehow he or she will be the exception. Why? Because passion and ego are blinding. Sure, you need passion to succeed, but you also have to know how to set eagerness aside and look at the facts.
Here are the Top 7 startup blunders I witness. Avoid them and you may also avoid ending up as just another sad statistic.
1. Taking it personally
When you pour everything into your business--creativity, passion, time, and money--the lines between the business and who you are as a person can easily blur. You are not your business, so stop taking everything so personally. When, for instance, someone says no or you make a mistake or an employee walks away or people give you input you're not ready to hear, it is not about you personally. Understand this and you'll make smarter decisions and spend less time licking your wounds and more time making money.
2. Underestimating expenses and ignoring numbers
You can't fix it if you don't know how broken it is. When I help my clients understand their numbers, they feel more in control, make better decisions, and even have a renewed sense of hope. Numbers tell important stories; listen to them and the path to success will become clear.
But to get to that point, you have to have money to begin with. Every minute of every day costs money when you own a business. When you determine a budget for your startup, double the amount of money you think you need--at least. Don't have it? Don't do it--not yet, anyway.
3. Not understanding the role of an entrepreneur
As a new entrepreneur, you may start out wearing many hats, but at some point you'll have to step into the shoes of a CEO. As a founder, you need to articulate your company's purpose and a clear and concise vision. You'll have to maintain a solid grasp on processes and protocols, company culture and policies, and partnership and growth opportunities. Make no mistake: You may be great at developing and delivering your product or service, but those are not the activities that will make you a successful entrepreneur in the end.
4. Avoiding customer feedback
"If it isn't broken, don't fix it." There is truth in that statement, but there is also danger. Staying with the status quo is shortsighted and may eventually lead to your company's demise.
Don't be afraid to ask people in your market what they need and want. If they love your brand, they will be eager to share their ideas, but some of the best feedback comes from those who don't love your brand. You may be missing a huge opportunity by ignoring customer and market feedback, so stow away your feelings and fears and get yourself out there.
5. Stressing out about the competition
I love coaching other coaches. I teach them my best secrets and skills, share my passion, and help to build their confidence. I also learn from them, feel inspired by them, and appreciate the added awareness they bring to the field of coaching.
You, too, can learn from your competition. Study rivals--don't fear them. Then get out there and be yourself. Spending time obsessing over the competition distracts entrepreneurs and deepens doubt and fear.
6. Choosing the wrong partners
This one is the saddest and most destructive of all. An uncertain entrepreneur would just about sign her life away for the promise of success, but there are no guarantees. Don't choose a partner, whether a co-founder or outside partner, based on a few exciting conversations.
It's important to balance skills, personality types, and long-term objectives. Once you find the right partner, do not avoid investing the time and money to create a fair and equitable contract, even if (especially if) your partner is a close friend or relative.
7. Not seeking out mentors and coaches
Listen up. You don't have to do this alone. In fact, you really should not do this alone. Sadly, most entrepreneurs don't set out to find a coach until they've been in business long enough to make devastating mistakes. They don't take the time to follow successful inspirational and industry leaders.
Ask for help, and surround yourself with experts and people who inspire you. Read their books, watch their videos, and learn from their mistakes.
Will you share your mistakes and what you've learned from them in the comments section below? Just think about how many less-experienced people you can help!