3 Deadly Mistakes of Inexperienced Entrepreneurs
Nov. 05, 2009 
20 Comments
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1. “I have an idea, lets run with it!”
You’re falling asleep one night and suddenly you’re hit by an idea! You have a hard time falling a sleep that night because you’re so excited. You wake up the next day, start throwing money, time and effort into this brand new idea. Three months later you decide that your new business/product idea is ready to launch. But then something horrible happens… You decide to do a quick Google search, to see if there might possibly be any product idea out there just like yours. After a few more searches your excitement drops and you feel like
you’ve been hit by a boulder…
Why didn’t you do this at the beginning?
I think we’re all guilty of this. We jump into a hot idea, expecting it to making us a fortune and it ends up disappointing us in the end. After spending months, or even years of money, time and effort on our can’t miss idea, we open our eyes one day I suddenly realize we’re fighting a loosing battle. We find out that there is no real market for our idea.
What could we have done at the very beginning that could have prevented this?
In one word, RESEARCH! Between the moment we came up with the idea and the day we decided to run with it, there was one step that is ABSOLUTELY CRUCIAL to the success of our idea, and should be the decider. How did we decide whether or not to run with the idea? Because it was great? But the sad truth is, it doesn’t matter how great your idea is, if you can’t “sell” you idea(whether it be a product, business, service, concept or system) to a market, it’s nothing more than just another idea.
NEVER, ever guess!!! Do your research, you can still loose, but at least you’ll know who’s going to buy your product before you launch it. Actually, before you release your idea to the public, get a bunch of people lined up. If people don’t line up in the first place, what does that tell you? It’s better that you come to this realization NOW, than later on after you’ve poured money, time and effort down the drain.
RESEARCH! Never guess!
2. “I’m going to drop out of school/quit my job to free up time for my start-up!” OK, first of all, how much money are you making on your start-up? Is it guaranteed monthly income, does it cover your monthly expenses(mortgage, insurance, gas, water, heating bills, cable, Internet etc.) and secondly does it raise enough every month to continue to support itself.
Second of all, is this what you want to do for the next 5-10 years? Are you giving up your education to because you want to dedicate yourself to your passion or because it’s “guaranteed” to make you more money than your post college career? Another questions you should ask yourself is: “Has this venture proved itself to the point where I want to sacrifice my career and lifestyle?”
I’m not a big fan of “job security” because I believe there’s really no such thing. If your business is making $2M annually, than go for it. But if you barely make enough to pay bills and get by a month than make sure your timing is right before handing in your two weeks notice to your old employer. Run some numbers before you put a lean on the farm and put a bet on the horse.
3. “I don’t need to research or write up a business plan”
Planning wont ensure you success but it will get you a hell of a lot closer. Failing to plan may cause you leave small forgotten details out of the picture, ones which could mean the ruin of your business. A plan is a road map on how to get to where you’re going. It’s not enough to just work towards “making more money” or “have 2,000 sign-ups by the end of the first quarter.” There has to be a well thought out plan of action that guides your business towards it’s goals. How do investors know what your future looks like? Are
they just suppose to take your word for it? How does your business decided what to do tomorrow? Without a plan of action your business lacks direction and is an accident waiting to happen. Don’t leave planning up to chance!
You’ll find that the deeper into the business world you dive the more common sense is required. Sometimes you need to take a leap of faith and follow your gut instinct. You wont need such an elaborate business plan. And sometimes it is smart to drop out of school to continue a business and follow a passion. It all depends on your unique situation. Always test new waters, try out new things and listen to people who have experience in your field.
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Hope this post helps a lot of people. Thanks for posting it Ben! You rock!
Clinton
I hope it does too. Thank you too.
Preparation. Preparation. And more preparation. Clinton's hit the mark: no one succeeds in business without mulling things over before acting. And regarding "dropping out of school," the urge among young entrepreneurs is definitely huge, but you really do need to justify it with plenty of revenue. Your business must be turning a hefty profit from that. So the bottom line? Don;t act on impulse.
Thanks for your insight and advice regarding this topic, Rocky. Regards.
Nice list. I teach project managers at PSU and planning is a pretty big deal. Most bloggers go with the 'fly by the seat of their pants' because, quite frankly, they don't know the scope of what they're getting into.
However, experienced bloggers have no excuse. It's never too late to formulate a plan and monitor it along the way.
Thanks for your advice Gabe!
Research is important to success in most areas of life. If you've never baked before naturally you are going to dig up a recipe, if you've never worked on a car engine you are going to look for the best mechanic for advise. The same should go for any business venture you are thinking about taking on. Many of us have sat at work and said, I could run this place better than those already at the helm so we tend to venture out with out solid research especially solid market research.
Thanks for your thoughtful comment Ms Freeman.
"before you release your idea to the public, get a bunch of people
lined up"
Yeah, you definitely need to have support.
Having no support is like trying to build a house with out the foundation!
Thanks Tony, I definitely agree.
-Ben
Part of me, maybe 90% totally agrees with these points but there's one thing I've learned. There's not just 1 way or strategy or road to making money and being successful. There are many ways but successful people always pick one way and stick to it.
Most people don't stick long enough and blame something or someone. Most people do need direction and a straight forward action plan to succeed but there are always exceptions to rules or the norm.
I agree with these point but just to give another point of view. Point 1 was about doing research, well if you look at the invention of the car or the walkman (portable music). Research told the inventors that people didn't want portable music and not a car, they wanted a faster horse but in the end they persisted and succeed but research didn't exactly do them any good. They went against what research told them.
Point 2 is about leaving school. Many people have succeeded and have not finished school. We all know that Bill gates dropped out of school and college. He is an exception but a story we all should know. Leaving the educational system is not the end, everybody should be educating themselves on an ongoing bases but if you leave school and stop learning that's a big NO NO.
Point 3. About writing up a business plan. It's a smart idea because it can help focus you and your business to where you want to go but that also can mean that you are not open to ideas, strategies, marketing and research just because your business plan doesn't mention them.
I just think if it weren't for the people breaking the rules and norms, we wouldn't have half the world we have today.
Thanks so much for your thoughtful comment, Blaine
The point 2 in your post makes me think through what I've done now. I have 6 months left in school and I've start making a little bit of buck from blogging. So should I become a full time blogger?
Well this is the time to decide! Good luck!
Thanks for all the comments guys!:)
No problem, by the way if you are interested in having a global picture next to your comments you can register on http://www.gravatar.com
i totally agree with you, a good business plan helps, when i dropped collage i did not had a good/clear business plan but i knew what i was doing. i knew how much is too much and i pulled up projects that were not good, when to pull out is always tough to decide but when the obvious is visible, no point denying that a failed idea is better to shutdown.
that being said, everything dosenot fails and i have been able to get some success on some part of my business, atleast i can back up my decision and say that i have achieved a lot more than what i could have by completing my education…
Thanks for your advice Uttoran!